The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to supersede AD 2024-06-02, Amendment 39-22707 (89 FR 21196, March 27, 2024) (AD 2024-06-02). AD 2024-06-02 applied to all GEAC Model M601D-11, M601E-11, M601E-11A, M601E-11AS, M601E-11S, and M601F engines. AD 2024-06-02 required a one-time DVI of the compressor case pad welds for any crack and replacement of the compressor case if necessary. The FAA issued AD 2024-06-02 to prevent failure of the centrifugal compressor case.

The NPRM was published in the Federal Register on April 23, 2025 (90 FR 17022). The NPRM was prompted by EASA AD 2024-0194, dated October 15, 2024 (EASA AD 2024-0194) (also referred to as the MCAI) issued by EASA, which is Technical Agent for the Member States of the European Union. The MCAI states that since that AD was issued, it has been confirmed that the compliance time for the DVI can be extended, and that repetitive DVIs of the affected part must be accomplished.

In the NPRM, the FAA proposed to require performing repetitive DVIs of the compressor case pad welds for any crack, replacing the compressor case if necessary, and sending certain inspection results to the manufacturer.

You may examine the MCAI in the AD docket at regulations.gov under Docket No. FAA-2025-0627.

The FAA received no comments on the NPRM or on the determination of the costs.

These products have been approved by the civil aviation authority of another country and are approved for operation in the United States. Pursuant to the FAA's bilateral agreement with this State of Design Authority, that authority has notified the FAA of the unsafe condition described in the MCAI referenced above. The FAA reviewed the relevant data and determined that air safety requires adopting this AD as proposed. Accordingly, the FAA is issuing this AD to address the unsafe condition on these products. Except for minor editorial changes, to include allowing the use of a part eligible for installation, this AD is adopted as proposed in the NPRM. None of the changes will increase the economic burden on any operator.

The FAA reviewed EASA AD 2024-0194, which specifies procedures for performing repetitive DVIs of the compressor case pad welds for any crack, replacement of the compressor case if necessary, and sending certain inspection results to the manufacturer.

This material is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

GEAC Model M601D, M601D-1, M601D-2, M601D-11NZ, M601E, M601E-21, M601FS, and M601Z engines do not have an FAA type certificate, therefore this AD does not include those engines in the applicability.

The FAA estimates that this AD affects 45 engines installed on airplanes of U.S. registry.

The FAA estimates the following costs to comply with this AD:

The FAA estimates the following costs to do any necessary replacements that would be required based on the results of the inspection. The agency has no way of determining the number of engines that might need this replacement:

The FAA has included all known costs in its cost estimate. According to the manufacturer, however, some of the costs of this AD may be covered under warranty, thereby reducing the cost impact on affected operators.

A federal agency may not conduct or sponsor, and a person is not required to respond to, nor shall a person be subject to a penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a currently valid OMB Control Number. The OMB Control Number for this information collection is 2120-0056. Public reporting for this collection of information is estimated to be approximately 1 hour per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. All responses to this collection of information are mandatory. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to: Information Collection Clearance Officer, Federal Aviation Administration, 10101 Hillwood Parkway, Fort Worth, TX 76177-1524.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.

The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

The FAA has determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify that this AD:

(1) Is not a “significant regulatory action” under Executive Order 12866,

(2) Will not affect intrastate aviation in Alaska, and

(3) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:

The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to Airbus Helicopters Deutschland GmbH Model EC135P1, EC135P2, EC135P2+, EC135P3, EC135T1, EC135T2, EC135T2+, EC135T3, EC635T2+, MBB-BK 117 C-2, MBB-BK 117 D-2, and MBB-BK 117 D-3 helicopters. The NPRM was published in the Federal Register on April 25, 2025 (90 FR 17348). The NPRM was prompted by EASA AD 2023-0066, dated March 24, 2023 (EASA AD 2023-0066) (also referred to as the MCAI), issued by EASA, which is the Technical Agent for the Member States of the European Union. The MCAI states that due to a review of design data, it was determined that hoist boom assemblies, part number (P/N) 44301-500, 44307-500, and 44307-500-1, must be inspected repetitively based on accumulated cycles. The additional inspection criteria were due to a new fatigue calculation to factor in external load, particularly human external cargo.

In the NPRM, the FAA proposed to require determining the total cycles of certain hoist boom assemblies, inspecting those hoist boom assemblies, and depending on the results, taking corrective action.

The FAA is issuing this AD to prevent failure of the hoist boom assembly. The unsafe condition, if not addressed, could lead to in-flight loss of the hoist load and consequent injury to occupants.

You may examine the MCAI in the AD docket at regulations.gov under Docket No. FAA-2025-0630.

The FAA received one comment from Air Evac Lifeteam. The following presents the comment received on the NPRM and the FAA's response to the comment.

Air Evac Lifeteam commented that the proposed AD lacks a compliance path for aircraft that do not have the affected part installed and requested the FAA revise the Applicability paragraph of the proposed AD to specify aircraft with the affected part installed. Air Evac Lifeteam alternatively suggested that the FAA add a compliance requirement for aircraft that do not have the affected part installed (Group 2 helicopters) that states that no further action is required.

The applicability statement in each AD action identifies all aircraft affected by that AD. All of the requirements of an AD apply to the aircraft listed in the applicability, unless a specific paragraph in the AD specifies that it applies only to certain aircraft, such as those with an affected part installed. The MCAI that this AD incorporates by reference includes an installation limitation that currently applies to all models listed in the Applicability paragraph of this AD. If the Applicability paragraph of this AD were revised to apply only to those aircraft with the affected part installed, the installation limitation would only apply to aircraft with the affected part installed, rather than all aircraft. The FAA did not change this AD as a result of this comment.

These products have been approved by the civil aviation authority of another country and are approved for operation in the United States. Pursuant to the FAA's bilateral agreement with this State of Design Authority, that authority has notified the FAA of the unsafe condition described in the MCAI referenced above. The FAA reviewed the relevant data and determined that air safety requires adopting this AD as proposed. Accordingly, the FAA is issuing this AD to address the unsafe condition on these products. Except for minor editorial changes, this AD is adopted as proposed in the NPRM. None of the changes will increase the economic burden on any operator.

The FAA reviewed EASA AD 2023-0066, which specifies procedures for inspecting certain part-numbered hoist boom assemblies at certain intervals and, depending on the results, replacing or removing certain parts or taking further corrective action to resolve the discrepancy [crack, deformation, dent, corrosion, or other damage] or replacing the hoist boom assembly. EASA AD 2023-0066 also provides a terminating action for the inspections and prohibits installing those part-numbered hoist boom assemblies on any helicopter unless its requirements are met.

This material is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

The MCAI applies to Model EC635 P2+, EC635 P3, EC635 T1, EC635 T3, and MBB-BK117 D-3m helicopters, whereas this AD does not because these model helicopters do not have an FAA type certificate.

The MCAI requires accomplishing a corrective action in accordance with the instructions of the service material, whereas this AD requires repairing or replacing affected parts that have certain discrepancies, within allowable limits, as described in this AD.

The FAA estimates that this AD affects 732 helicopters of U.S. registry. Labor rates are estimated at $85 per hour. Based on these numbers, the FAA estimates the following costs to comply with this AD.

If required, determining the total cycles will take 0.5 work-hour for an estimated cost of $43 per helicopter. Inspecting a hoist boom assembly will take 4 work-hours for an estimated cost of $340 per helicopter and $248,880 for the U.S. fleet, per inspection cycle.

Repairing any surface deformation, damage, or corrosion that is within allowable limits will take up to 1 work-hour and parts will cost a nominal amount for an estimated cost of up to $85 per helicopter. Replacing a hoist boom assembly (which includes a boom elbow, boom tube, and boom adapter) will take up to 5 work-hours (depending on configuration) and parts will cost up to $88,812 (depending on P/N) for an estimated cost of up to $89,237 per helicopter.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.

The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify that this AD:

(1) Is not a “significant regulatory action” under Executive Order 12866,

(2) Will not affect intrastate aviation in Alaska, and

(3) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:

The FAA issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain Airbus Helicopters Model AS 332L2 and EC 225LP helicopters. The NPRM was published in the Federal Register on June 2, 2025 (90 FR 23297). The NPRM was prompted by AD 2024-0142, dated July 17, 2024 (EASA AD 2024-0142) (also referred to as the MCAI), issued by EASA, which is the Technical Agent for the Member States of the European Union. The MCAI states that two attachment screws (bolts) were found overlengthened and deformed on helicopters having the new link of the MGB suspension bar attachment brackets. The MCAI further states the investigation is still ongoing and that collecting additional data to support the investigation is part of addressing the unsafe condition.

In the NPRM, the FAA proposed to require replacing certain attachment bolts on the MGB suspension bar fittings, inspecting the removed bolts, and reporting the results of this inspection to Airbus Helicopters. The FAA is issuing this AD to prevent structural failure of the MGB suspension bar attachment bolts. This condition, if not addressed, could result in failure of an MGB attachment assembly, detachment of an MGB suspension bar, and consequent loss control of the helicopter.

You may examine the MCAI in the AD docket at regulations.gov under Docket No. FAA-2025-0914.

The FAA received no comments on the NPRM or on the determination of the costs.

These products have been approved by the civil aviation authority of another country and are approved for operation in the United States. Pursuant to the FAA's bilateral agreement with this State of Design Authority, that authority has notified the FAA of the unsafe condition described in the MCAI referenced above. The FAA reviewed the relevant data, considered any comments received, and determined that air safety requires adopting this AD as proposed. Accordingly, the FAA is issuing this AD to address the unsafe condition on these products. Except for minor editorial changes, this AD is adopted as proposed in the NPRM. None of the changes will increase the economic burden on any operator.

The FAA reviewed EASA AD 2024-0142. This material specifies procedures for replacing attachment screw part number 332A22-3644-20 with a part that is new (never been installed), inspecting the removed screws, and reporting the inspection results to Airbus Helicopters. The attachment screws are installed on the left-hand and right-hand rear MGB suspension bar fittings. Additionally, EASA AD 2024-0142 prohibits installing that part-numbered attachment screw on any helicopter unless it is installed in accordance with certain service instructions.

This material is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the ADDRESSES section.

Where the material referenced in the MCAI specifies contacting Airbus Helicopters for instructions if the difference between (L4) and (L3) is more than 1.6 mm (.063 in), this AD requires using a repair method approved by the FAA, EASA, or Airbus Helicopters' EASA Design Organization Approval.

Where the MCAI prohibits installing an affected part unless it has been installed in accordance with certain service instructions, this AD does not contain that prohibition.

The FAA considers that this AD is an interim action. The inspection reports that are required by this AD will enable the manufacturer to obtain better insight into the nature and cause of the screw deformation and eventually to develop final action to address the unsafe condition. Once a final action has been identified, the FAA might consider further rulemaking.

The FAA estimates that this AD affects 38 helicopters of U.S. registry. Labor rates are estimated at $85 per hour. Based on these numbers, the FAA estimates the following costs to comply with this AD.

Replacing a set of eight rear MGB fitting attachment bolts takes 16 work-hours and parts cost $587 for an estimated cost of $1,947 per helicopter and $73,986 for the U.S. fleet.

Reporting inspection results takes 1 work-hour for an estimated cost of $85 per helicopter.

A federal agency may not conduct or sponsor, and a person is not required to respond to, nor shall a person be subject to a penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a currently valid OMB Control Number. The OMB Control Number for this information collection is 2120-0056. Public reporting for this collection of information is estimated to take approximately 1 hour per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. All responses to this collection of information are mandatory. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to: Information Collection Clearance Officer, Federal Aviation Administration, 10101 Hillwood Parkway, Fort Worth, TX 76177-1524.

Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. Subtitle VII: Aviation Programs, describes in more detail the scope of the Agency's authority.

The FAA is issuing this rulemaking under the authority described in Subtitle VII, Part A, Subpart III, Section 44701: General requirements. Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.

This AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.

For the reasons discussed above, I certify that this AD:

(1) Is not a “significant regulatory action” under Executive Order 12866,

(2) Will not affect intrastate aviation in Alaska, and

(3) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.

Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:

The Entity List (supplement no. 4 to part 744 of the EAR (15 CFR parts 730-774)) identifies entities for which there is reasonable cause to believe, based on specific and articulable facts, that the entities have been involved, are involved, or pose a significant risk of being or becoming involved in activities contrary to the national security or foreign policy interests of the United States, pursuant to § 744.11(b). The EAR imposes additional license requirements on, and limits the availability of, most license exceptions for exports, reexports, and transfers (in-country) when a listed entity is a party to the transaction. The license review policy for each listed entity is identified in the “License Review Policy” column on the Entity List, and the impact on the availability of license exceptions is described in the relevant Federal Register document that added the entity to the Entity List. The Bureau of Industry and Security (BIS) places entities on the Entity List pursuant to part 744 (Control Policy: End-User and End-Use Based) and part 746 (Embargoes and Other Special Controls) of the EAR.

The End-User Review Committee (ERC), composed of representatives of the Departments of Commerce (Chair), State, Defense, Energy and, where appropriate, the Treasury, makes decisions regarding additions to, removals from, or other modifications to the Entity List. The ERC makes decisions to add an entry to the Entity List by majority vote and makes decisions to remove or modify an entry by unanimous vote.

The ERC determined to add the Chinese Academy of Sciences, National Time Service Center, under the destination of China, to the Entity List. This entity is being added for acquiring and attempting to acquire U.S.-origin items in support of advancing China's military and defense-related space-domain activities, as well as China's quantum technology capabilities; these actions have serious ramifications for U.S. national security, given the military applications of quantum technologies. This entity will be added with a license requirement for all items subject to the EAR and licenses will be reviewed under a presumption of denial.

The ERC determined to add Beijing Fudan Microelectronics Technology Co., Ltd.; Shanghai Fudan Microelectronics Co., Ltd.; Shenzhen Fudan Microelectronics Co., Ltd.; Shanghai Fukong Hualong Microsystem Technology Co., Ltd.; Shanghai Fuwei Xunjie Digital Technology Co., Ltd.; and Sino IC Technology Co., Ltd., under the destination of China, and Shanghai Fudan Microelectronics (HK) Co., Ltd. under the destinations of China, Singapore, and Taiwan, to the Entity List. These entities are added for acquiring and attempting to acquire U.S.-origin items in support of China's military modernization, for participating in China's advanced computing and integrated circuit manufacturing and distribution sectors, and directly supplying the military, government, and security apparatus of China. These entities are added with a license requirement for all items subject to the EAR. They are added with a license review policy of presumption of denial.

The ERC has further determined that Shanghai Fudan Microelectronics Co., Ltd. and Sino IC Technology Co., Ltd. will receive a footnote 4 designation. These entities are involved in the production of high-performance computing (HPC) chips, including for artificial intelligence and other dual-use applications. Additionally, Shanghai Fudan Microelectronics Co., Ltd. has supplied technology to Russian military end users. For purposes of the license requirements applicable to these entities, “items subject to the EAR” include foreign-produced items described in § 734.9(e)(2) of the EAR.

The ERC determined to add AR Sales Pvt Ltd., under the destination of India, to the Entity List. This addition is being made because the entity has diverted or attempted to divert U.S.-origin items to Russia without prior authorization from BIS. In addition, the entity has engaged in dilatory, evasive, or misleading behavior regarding the importation of U.S.-origin items that effectively prevented end-use checks (EUCs) from occurring or made the EUCs inaccurate. A license is required for all items subject to the EAR. License applications will be reviewed under a presumption of denial.

The ERC determined to add Atempo Proje Taahhüt Ses ve Görüntü Sistemleri Anonim Şirketi İstanbul Şubesi (Atempo); EB Teknoloji Sistemleri Anonım Şirketi (EB Teknoloji); and Dentun Elektronik, all under the destination of Turkey, to the Entity List. These companies have diverted or attempted to divert controlled U.S.-origin items to Russia without prior authorization from BIS. Dentun Elektronik has exported U.S.-origin Common High Priority List (CHPL) electronics to Russia and repeatedly engaged in evasive and dilatory conduct that prevented a BIS EUC from occurring. Moreover, EB Teknoloji, in conjunction with Atempo, is engaged in concealing shipments of Tier 2 CHPL U.S.-origin goods to Russian entities. These items are primarily electronic components that have been retrieved from Russian weapons found on the battlefield or have been identified as essential items for Russia to manufacture its own military equipment. The ERC has determined that, due to their significant risk of involvement in the supply or diversion of items subject to the EAR to procurement networks for Russia's defense industry or intelligence services, two of these entities, Atempo and EB Teknoloji, qualify as Russian Procurement Entities under § 734.9(g) of the EAR and are receiving a footnote 3 designation. A footnote 3 designation subjects these entities to the Russia/Belarus-Military End User and Procurement FDP rule, detailed in § 734.9(g). These entities are added with a license requirement for all items subject to the EAR. These applications will be reviewed under a policy of denial.

The ERC determined to add one entity to the Entity List: Smart Mail Services under the destinations of Iran and the United Arab Emirates. This addition is being made because the U.S. government has identified this entity as a facilitator of the illicit transshipment network of Hossein Hatefi Ardakani. The Department of the Treasury's Office of Foreign Assets Control designated Ardakani on December 19, 2023, for having provided, or attempted to provide, financial, material, technological or other support for, or goods or services in support of, the Islamic Revolutionary Guard Corps Aerospace Force Self Sufficiency Jihad Organization. A license is required for all items subject to the EAR. License applications will be reviewed under a presumption of denial.

The ERC determined to add Hua Ke Supply Chain (HK) Limited; Hua Ke Logistics (HK) Limited; and Shenzhen Xinlikang Supply Chain Management Co., Limited, under the destination of China, to the Entity List. These entities are added for their involvement in the diversion of dual-use items in support of sanctioned entities, including the Iranian military. These entities will be added with a license requirement for all items subject to the EAR and licenses will be reviewed under a presumption of denial.

The ERC determined to add HAS General Trading LLC, under the destination of the UAE, to the Entity List for engaging in the export and attempted export of items on the Commerce Control List (CCL) from the U.S. to Iran and Russia through the UAE, in apparent violation of the Iranian Transactions and Sanctions Regulations (ITSR, 31 CFR part 560) and the EAR. The entity is added with a license requirement for all items subject to the EAR. License applications will be reviewed with a presumption of denial.

The ERC determined to add Aerospace Information Research Institute, Chinese Academy of Sciences, under the destination of China, to the Entity List. Specifically, this entity is being added for its connections to companies that support China's High Altitude Balloon program. This entity will be added with a license requirement for all items subject to the EAR and licenses will be reviewed under a presumption of denial. Licenses will be reviewed on a case-by-case basis for items for U.S. government supported use of U.S. land remote sensing satellite data, under § 740.11(b). This license requirement may be overcome by License Exception GOV under § 740.11(b).

The ERC determined to add GMC Semiconductor Technology (Wuxi) Co., Ltd.; and Jicun Semiconductor Technology (Shanghai) Co., Ltd., under the destination of China, to the Entity List. These additions are being made because of the entities' acquiring of U.S.-origin items for diversion to parties on the Entity List. Specifically, these entities acquired U.S. origin semiconductor manufacturing equipment for two Entity List parties, SMIC Northern Integrated Circuit Manufacturing (Beijing) Co., Ltd. and Semiconductor Manufacturing International (Beijing) Corporation, without the requisite license or authorization from BIS (see 85 FR 83420, Dec. 22, 2020). A license is required for all items subject to the EAR for these entities; license applications will be reviewed under a presumption of denial.

The ERC determined to add Beijing Tianyi Huiyuan Biotechnology Co., Ltd.; Beijing Tsingke Biotech Co., Ltd.; and Sangon Biotech (Shanghai) Co., Ltd., under the destination of China, to the Entity List. These entities pose an unacceptable risk of using or diverting U.S. origin items for the People's Liberation Army (PLA) Academy of Military Medical Sciences (AMMS). These entities will be added with a license requirement for all items subject to the EAR and licenses will be reviewed under a presumption of denial.

The ERC determined to add Shanghai Suochen Information Technology Co., Ltd.; and Hong Kong DEMX Co., Ltd., under the destination of China, to the Entity List. These additions are being made because these entities develop computer-aided engineering software for key customers in the Chinese military-industrial complex, including those on the BIS Entity List. These entities are added with a license requirement for all items subject to the EAR and a license review policy of presumption of denial.

The ERC determined to add Changsha NetForward Electronic Technology Co., Ltd.; Changzhou NetForward Microelectronics Co., Ltd.; Chengdu NetForward Microelectronics Co., Ltd.; and Shenzhen NetForward Microelectronics Co., Ltd., all under the destination of China, to the Entity List. These additions are being made because they pose a risk of circumvention of export controls and diversion to entity-listed parties. These entities will be added with a license requirement for all items subject to the EAR and licenses will be reviewed under a presumption of denial.

For the reasons described above, this final rule adds the following 32 entities to the Entity List and includes, where appropriate, aliases:

• Aerospace Information Research Institute, Chinese Academy of Sciences,

• Beijing Fudan Microelectronics Technology Co., Ltd.,

• Beijing Tianyi Huiyuan Biotechnology Co., Ltd.,

• Beijing Tsingke Biotech Co., Ltd.,

• Changsha NetForward Electronic Technology Co. Ltd.,

• Changzhou Netforward Microelectronics Co., Ltd.,

• Chengdu NetForward Microelectronics Co., Ltd.,

• Chinese Academy of Sciences, National Time Service Center,

• GMC Semiconductor Technology (Wuxi) Co., Ltd.,

• Hong Kong DEMX Co., Ltd.,

• Hua Ke Logistics (HK) Limited,

• Hua Ke Supply Chain (HK) Limited,

• Jicun Semiconductor Technology (Shanghai) Co., Ltd.,

• Sangon Biotech (Shanghai) Co., Ltd.,

• Shanghai Fudan Microelectronics Co., Ltd.,

• Shanghai Fudan Microelectronics (HK) Co., Ltd.,

• Shanghai Fukong Hualong Microsystem Technology Co., Ltd.,

• Shanghai Fuwei Xunjie Digital Technology Co., Ltd.,

• Shanghai Suochen Information Technology Co., Ltd.,

• Shenzhen Fudan Microelectronics Co., Ltd.,

• Shenzhen NetForward Microelectronics Co., Ltd.,

• Shenzhen Xinlikang Supply Chain Management Co., Limited, and

• Sino IC Technology Co., Ltd.

• AR Sales Pvt Ltd.

• Smart Mail Services.

• Shanghai Fudan Microelectronics (HK) Co., Ltd.

• Shanghai Fudan Microelectronics (HK) Co., Ltd.

• Atempo Proje Taahhüt Ses ve Görüntü Sistemleri Anonim Şirketi İstanbul Şubesi,

• Dentun Elektronik, and

• EB Teknoloji Sistemleri Anonim Şirketi.

• HAS General Trading LLC, and

• Smart Mail Services.

The ERC determined to remove Intertech Rus LLC addresses of d. 27 str. 2 etazh/pom./kom. 2/IV/1-3,5-25, ul. Elektrozavodskaya Moscow, 107023 Russian Federation and 8, 2nd Brestskaya str., 10th Floor 125047, Moscow Russia from the Entity List based on the review the ERC conducted in accordance with procedures described in supplement no. 5 to part 744 of the EAR.

This final rule revises twenty-seven entries on the Entity List consisting of three entries under Belarus, 11 entries under China, one entry under Iran, one entry under Pakistan, nine entries under Russia, and two entries under Turkey to correct typographical errors in the alias, address, license requirements, Federal Register citation, or punctuation.

“Belmicrosystems Research and Design Center,” first added to the Entity List on June 28, 2010 (75 FR 36516); “SOE Semiconductor Devices Factory,” first added to the Entity List on June 28, 2010 (75 FR 36516); and “Vasili Kuntsevich,” first added to the Entity List on June 28, 2010 (75 FR 36516).

“Allchips Limited,” first added to the Entity List on August 27, 2024 (89 FR 68548); “Beijing E-science Co., Ltd.,” first added to the Entity List on July 12, 2021 (86 FR 36499); “Beijing Leike Defense Technology Co., Ltd.,” first added to the Entity List on May 9, 2024 (89 FR 41888, May 14, 2024); “China Electronics Technology Group Corporation 52nd Research Institute,” first added to the Entity List on December 21, 2021 (86 FR 71559); Furuida Heilongjiang Supply Chain Management Co., Ltd.,” first added to the Entity List on August 27, 2024 (89 FR 68548); “Harbin Institute of Technology,” first added to the Entity List on June 5, 2020 (85 FR 34497); “Hexin Xingtong Technology (Beijing) Co., Ltd.,” first added to the Entity List on May 9, 2024 (89 FR 41888, May 14, 2024); “Nanjing Colpak Mechanical Equipment Co., Ltd.,” first added to the Entity List on March 2, 2023 (88 FR 13675, March 6, 2023); “Northwestern Polytechnical University,” first added to the Entity List on May 14, 2001 (66 FR 24266); “Onstar Electronics Co. Ltd.,” first added to the Entity List on October 6, 2023 (88 FR 70353, October 11, 2023); and “Shenzhen Shunjinxin Import & Export Co. Ltd.,” first added to the Entity List on September 22, 2020 (85 FR 59421).

“General Electronic,” first added to the Entity List on August 27, 2024 (89 FR 68548).

“AHD International,” first added to the Entity List on March 22, 2018 (83 FR 12479).

“Daltransgaz, OAO,” first added to the Entity List on September 7, 2016 (81 FR 61601); “Federal State Enterprise Perm Powder Plant,” first added to the Entity List on August 27, 2024 (89 FR 68548); “Joint Stock Company ODK-Klimov,” first added to the Entity List on August 27, 2024 (89 FR 68548); “Limited Liability Company Analytical Manufactory,” first added to the Entity List on August 27, 2024 (89 FR 68548); “Limited Liability Company Eluent Laboratories,” August 27, 2024 (89 FR 68548); “Limited Liability Company Medstandart,” first added to the Entity List on August 27, 2024 (89 FR 68548); “Limited Liability Company Rusmedtorg,” first added to the Entity List on August 27, 2024 (89 FR 68548); “LLC Volgogradpromproyekt,” first added to the Entity List on June 18, 2024 (89 FR 51652); and “Public Joint Stock Company UEC-Ufa Engine Industrial Association,” first added to the Entity List on August 27, 2024 (89 FR 68548).

“Biopharmist Medikal Urunler Dis Ticaret LTD STI,” first added to the Entity List on August 27, 2024 (89 FR 68548) and “BuyBest Electronic,” first added to the Entity List on August 27, 2024 (89 FR 68548).

Shipments of items removed from eligibility for a License Exception or export, reexport, or transfer (in-country) without a license (NLR) as a result of this regulatory action that were en route aboard a carrier to a port of export, reexport, or transfer (in-country), on September 12, 2025, pursuant to actual orders for export, reexport, or transfer (in-country) to or within a foreign destination, may proceed to that destination under the previous eligibility for a License Exception or export, reexport, or transfer (in-country) without a license (NLR), provided the export, reexport, or transfer (in-country) is completed no later than on October 14, 2025.

On August 13, 2018, the President signed into law the John S. McCain National Defense Authorization Act for Fiscal Year 2019, which included the Export Control Reform Act of 2018 (ECRA) (50 U.S.C. 4801-4852). ECRA provides the legal basis for BIS's principal authorities and serves as the authority under which BIS issues this rule. In particular, Section 1753 of ECRA (50 U.S.C. 4812) authorizes the regulation of exports, reexports, and transfers (in-country) of items subject to U.S. jurisdiction. Further, Section 1754(a)(1)-(16) of ECRA (50 U.S.C. 4813(a)(1)-(16)) authorizes, inter alia, establishing and maintaining a list of foreign persons and end-uses that are determined to be a threat to the national security and foreign policy of the United States pursuant to the policy set forth in Section 1752(2)(A), and restricting exports, reexports, and in-country transfers of any controlled items to any foreign person or end-use so listed; apprising the public of changes in policy, regulations, and procedures; and any other action necessary to carry out ECRA that is not otherwise prohibited by law. Pursuant to Section 1762(a) of ECRA (50 U.S.C. 4821(a)), these changes can be imposed in a final rule without prior notice and comment.

1. This rule has been determined to be not significant for purposes of Executive Order 12866. This final rule is not a regulatory action pursuant to E.O. 14192 because it is not a significant rule under E.O. 12866.

2. Notwithstanding any other provision of law, no person is required to respond to or be subject to a penalty for failure to comply with a collection of information, subject to the requirements of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ) (PRA), unless that collection of information displays a currently valid Office of Management and Budget (OMB) Control Number. This regulation involves an information collection approved by OMB under control number 0694-0088, Simplified Network Application Processing System. BIS does not anticipate a change to the burden hours associated with this collection as a result of this rule. Information regarding the collection, including all supporting materials, can be accessed at: https://www.reginfo.gov/public/do/PRAMain.

3. This rule does not contain policies with federalism implications as that term is defined in Executive Order 13132.

4. Pursuant to section 1762 of the Export Control Reform Act of 2018, this action is exempt from the Administrative Procedure Act (5 U.S.C. 553) requirements for notice of proposed rulemaking, opportunity for public participation, and delay in effective date.

5. Because a notice of proposed rulemaking and an opportunity for public comment are not required to be given for this rule by 5 U.S.C. 553, or by any other law, the analytical requirements of the Regulatory Flexibility Act (5 U.S.C. 601, et seq. ), are not applicable. Accordingly, no regulatory flexibility analysis is required, and none has been prepared.

Accordingly, part 744 of the Export Administration Regulations (15 CFR parts 730-774) is amended as follows:

Interested persons are invited to participate in this rulemaking by submitting written data, views, or arguments on all aspects of the interim final rule. CBP also invites comments that relate to the economic, environmental, or federalism effects that might result from this rule.

Comments that will provide the most assistance to CBP will reference a specific portion of the interim final rule, explain the reason for any recommended change, and include data, information, or authority that support such recommended change.

U.S. Customs and Border Protection (CBP) assesses and collects tonnage taxes on vessels brought into the United States from a foreign port or place under the authority of 46 U.S.C. 60301. 1 Section 4.20 of title 19 of the Code of Federal Regulations (19 CFR 4.20) details how CBP calculates regular tonnage taxes. In general, CBP calculates regular tonnage taxes based on either a lower rate of 2 cents per net ton for certain specified vessels, not to exceed 10 cents per net ton in any one year, or a higher rate of 6 cents per net ton, not to exceed 30 cents per net ton per year, for all other vessels. 2 See 46 U.S.C. 60301(a), (b); 19 CFR 4.20(a). Additional regulatory provisions describe the exceptions to regular tonnage tax, the process for obtaining a certificate of payment and cash receipt, the process for applying for a refund, and guidance on how regular tonnage tax is calculated. See 19 CFR 4.20-4.21, 4.23-4.24. Tonnage tax is generally collected along with special tonnage taxes and light money, if applicable. See 19 CFR 4.20(c), 4.22. 3

The relevant statute and CBP regulations establish a yearly maximum for the payment of regular tonnage taxes. 46 U.S.C. 60301(a), (b); 19 CFR 4.20(a). For example, if a vessel has made five payments at the 2-cent rate during a tonnage year, CBP will not assess additional regular tonnage tax at the 2-cent rate on that vessel for the remainder of that tonnage year. See 19 CFR 4.20(b). Similarly, if a vessel has made five payments at the 6-cent rate during a tonnage year, CBP will not assess additional tonnage tax at the 6-cent rate on that vessel for the remainder of that tonnage year. See 19 CFR 4.20(b).

When determining whether a vessel has met the yearly maximum, CBP calculates a “tonnage year” that is unique to each vessel. The tonnage year starts on the date of the first entry of the vessel concerned and expires on the day preceding the corresponding date of the following year. See 19 CFR 4.20(b).

The use of a unique tonnage year for each vessel results in an overly complicated calculation of regular tonnage taxes. For each vessel, the CBP officer must determine the relevant tonnage year to determine whether the yearly maximums have been met. This process increases the opportunities for errors in the tonnage tax calculation, resulting in both overpayments and underpayments. Overpayments result in additional work for CBP to process any requests for a refund and underpayments result in a loss of revenue for the U.S. Government. Additionally, if CBP identifies an error in a vessel's tonnage tax calculation, the process to correct the vessel history can be arduous and time consuming.

A consistent tonnage year for all vessels will simplify the tonnage tax collection process and will provide greater certainty on the amount of money due for both CBP and the vessel agents and operators. CBP officers will be able to calculate tonnage taxes more quickly because they will not need to determine each vessel's unique tonnage year. Additionally, vessel agents and operators will be better able to predict their yearly tonnage tax payments and will need to spend less time checking their payment history for errors because there will be less uncertainty on when a tonnage year starts or ends.

Upon each payment of regular tonnage tax, special tonnage tax or light money, CBP provides to the master of the vessel a certificate on CBP Form 1002 (Certificate of Payment of Tonnage Tax) that includes the control number from the related cash receipt (CBP Form 368 or 368A). 4 See 19 CFR 4.23. CBP Form 1002 constitutes the official evidence of the payment of regular tonnage taxes, special tonnage taxes, and light money. See 19 CFR 4.23. This certificate must be presented upon each entry during the tonnage year to establish the date of commencement of the tonnage year and to ensure against overpayment. See 19 CFR 4.23.

This manual, paper-based receipt process outlined in the regulations is cumbersome for CBP officers and vessel agents and operators. 5 The process requires duplicative receipts for the payment of tonnage taxes because CBP prepares and issues, and the vessel agents and operators must keep in the records, a receipt for the payment of tonnage taxes on CBP Form 368 or 368A, as well as a receipt on CBP Form 1002.

In order to modernize this paper-based process, this rule will replace CBP Form 1002 with an electronic receipt in most circumstances. This automation will result in multiple benefits to both CBP and vessel agents and operators. For example, CBP personnel can create draft receipts prior to boarding a vessel, which decreases the amount of time it takes to fill out and issue the receipt. This enables CBP personnel to issue electronic receipts more quickly and efficiently. Additionally, the automation provides vessel owners and operators with the ability to store and receive receipts electronically. This decreases the possibility that a vessel agent or operator will be unable to provide evidence of prior tonnage tax payments and would be required to obtain a replacement receipt from the port director to whom the payment was made. See 19 CFR 4.23.

This rule changes the definition of a tonnage year in 19 CFR 4.20(b) to align with the fiscal year of the Federal Government, starting on October 1 of each year and ending on September 30 of the following year. 6 See 31 U.S.C. 1102. CBP will no longer calculate a tonnage year based on when a particular vessel first enters the United States.

This change will simplify the tonnage tax collection process, eliminate the unique calculation of a tonnage year for each vessel, and reduce errors caused by multiple tonnage years, thereby considerably reducing the time and effort CBP officers currently spend calculating tonnage taxes and investigating and correcting tonnage tax errors. This is part of a broader effort by CBP to align various taxes and fees with the fiscal year to simplify assessments and collections and improve efficiencies for both CBP and the public. CBP is not changing the requirement that the tonnage tax year is calculated without regard to the rate of the payment made at the first entry of the vessel concerned.

As a result of this change, most vessels will be required to start a new tonnage year earlier than they would without this rule. For example, a vessel that has paid the yearly maximum under current requirements and which has several more months until the vessel's unique tonnage year expires, would be required to start a new tonnage year on October 1. CBP does not expect this to cause significant disruption to vessel operations because the rate of applicable tonnage taxes is not increasing, and tonnage taxes are generally not a significant cost compared to other vessel duties and taxes. Additionally, CBP does not expect the tonnage tax revenue in the transition year to be significantly higher compared to subsequent years as a result of this rule. Finally, CBP has conducted outreach to the trade, which has been supportive of this change. 7

This rule amends several provisions in 19 CFR 4.20 and 4.23 to modernize the receipt process so that CBP may issue a single, electronic receipt for the payment of regular tonnage tax, special tonnage tax, and light money. This contrasts with the current procedures outlined in the regulations, which require CBP to issue two paper receipts for each payment at each entry.

First, this rule amends 19 CFR 4.23 to state that CBP will issue to the master of each vessel, upon each payment of regular tonnage tax, special tonnage tax, or light money, a receipt of payment. This will replace the current paper-based process in the regulations, that require CBP to issue a certificate of payment on CBP Form 1002, as well as a receipt on CBP Form 368/368A for the same payment. See 19 CFR 4.23. In most situations, CBP will provide the master of the vessel with an electronic receipt. If CBP is unable to provide an electronic receipt, such as in a system outage, CBP will issue a receipt on a paper CBP Form 368/368A or other equivalent paper receipt. The receipt will constitute the official evidence of payment and must be presented upon each entry during the tonnage year to ensure against overpayment. See new 19 CFR 4.23. In the absence of the receipt, evidence of payment of tonnage tax can be obtained from the port director to whom the payment was made. Id. The vessel agents and operators are responsible for maintaining their records of payment, electronically or on paper, to be available for CBP review.

As a result of this change, CBP Form 1002 will be eliminated. CBP will not be required to maintain paper copies of CBP Form 1002 and vessel agents and operators will not be required to maintain paper copies of finalized CBP Form 1002s. Vessel agents and operators should maintain any finalized CBP Forms 1002 for the entirety of any tonnage year in which they received a paper CBP Form 1002 as a receipt of payment.

Second, CBP is amending section 4.20(f)(2) to eliminate the reference to “Customs Form 1002.” Pursuant to 19 CFR 4.20(f)(2), certain information is noted on CBP Form 1002 and on the Vessel Entrance or Clearance Statement, CBP Form 1300. This notation on two forms is redundant and does not serve CBP operations. CBP will continue to include the necessary information on CBP Form 1300 and on the receipt issued for payment. CBP is also amending section 4.20(f)(2) so that “Customs Form 1300” is referred to as “CBP Form 1300” in accordance with current naming conventions.

Finally, CBP is amending 19 CFR 4.23 so that the receipt for payment of tonnage taxes is no longer used to establish when the tonnage year starts for a particular vessel. A consistent tonnage year for all vessels, equal to the fiscal year of the Federal Government, means that CBP does not need to rely on the receipt of payment for each vessel to establish when a tonnage year starts. CBP will continue to rely on the receipt of payment when determining whether a vessel has reached the yearly maximum number of payments for a tonnage tax rate.

In addition to defining the tonnage year, 19 CFR 4.20(b) provides the maximum number of payments during a tonnage year, five payments at the maximum (6-cent) rate and five payments at the minimum (2-cent) rate, so that the maximum assessment of regular tonnage taxes may amount to 40 cents per net ton for the tonnage year of a vessel engaged in alternating trade. This rule amends section 4.20(b) to improve readability and clarity. CBP does not intend for this change to substantively affect the calculation of tonnage taxes.

CBP uses four scenarios listed in 19 CFR 4.20 as guidance when determining the port of origin for a voyage to the United States and the applicable rate of regular tonnage tax. See 19 CFR 4.20(a)(1)-(4). CBP is revising the wording of these scenarios to provide more clarity for the trade and to the ports of entry. The revisions are not intended to substantively alter how CBP determines a port of origin or rate of tonnage tax.

Section 553(b) of the Administrative Procedure Act (APA) generally requires agencies to publish a notice of proposed rulemaking in the Federal Register that solicits public comments before the rule takes effect. CBP finds that this rule is exempt from prior notice and comment rulemaking procedures under section 553(b)(A) of the APA. Pursuant to section 553(b)(A), the standard prior notice and comment procedures do not apply to an agency rulemaking to the extent that the rule involves matters of “agency organization, procedure, or practice.” Rules are procedural if they are “primarily directed toward improving the efficient and effective operations of an agency, not toward a determination of the rights or interests of affected parties.” Mendoza v. Perez, 754 F.3d 1002, 1023 (D.C. Cir. 2014) (quoting Batterton v. Marshall, 648 F.2d 694, 702 n.34 (D.C.C. 1980). The purpose of the exception is “to ensure that agencies retain latitude in organizing their internal operations.” Mendoza, 754 F.3d at 1023 (quoting Batterton, 648 F.2d at 707).

This rule is a procedural rule promulgated for efficiency purposes that falls within this exception. This rulemaking replaces a paper certificate of payment of tonnage tax (CBP Form 1002) with an electronic receipt, or if an electronic receipt is not feasible, with a single, equivalent paper receipt. This is a change in the format of the receipt and does not change any of the substantive requirements related to the payment or receipt process. Eliminating CBP Form 1002 so that certain information is listed only on the Vessel Entrance or Clearance Statement, CBP Form 1300, and not on both CBP Forms 1300 and 1002 is also only a change in CBP recordkeeping procedures that does not affect the substantive rights or interests of the public.

Additionally, the shift to a tonnage year that is aligned with the fiscal year does not substantively affect the rights or interests of the public. Congress has determined the substantive requirements of tonnage tax, including the applicable rates and the yearly maximums. See 46 U.S.C. 60301. This rule does not change those substantive requirements, and vessel agents and operators will continue to be subject to the same rates and the same requirements for meeting the yearly maximums regardless of this rule. The only change to the tonnage tax process is to change which 12-month period CBP uses to determine the tonnage year. CBP considers this change to merely set forth a CBP accounting procedure for implementing the statute that does not itself impose a substantive requirement. Although average tonnage tax revenue is expected to increase under this rule, an estimated 94% of all vessels in a given year will pay no more in tonnage tax with the rule than without it. For those vessels that do pay more tonnage tax in a given year, the increase will be nominal, with the average tonnage tax per entry increasing by approximately $128. For these reasons, CBP may forgo advance notice and comment.

As discussed above, section 553(b) of the APA generally requires agencies to publish a notice of proposed rulemaking in the Federal Register that solicits public comments before the provisions of the rule take effect. In addition to the aforementioned procedural rule exception, CBP finds that this rule is exempt from the prior notice and public comment requirements for good cause under 5 U.S.C. 553(b)(B), which permits agencies to forgo those procedures when they are impracticable, unnecessary, or contrary to the public interest. CBP finds prior notice and comment unnecessary in this case because this rule does not impose new obligations on the public, does not alter the substantive requirements governing tonnage tax rates or eligibility, and instead eliminates duplicative and outdated administrative processes. The revisions streamline how CBP documents tonnage tax payments and standardizes the tonnage year across all vessels, improving internal consistency and clarity for vessel agents and operators. Because these changes are limited to administrative procedures and remove, rather than impose, compliance burdens, standard notice and comment is unnecessary under 5 U.S.C. 553(b)(3)(B). Although prior notice and comment is not required in this context, CBP nonetheless invites post promulgation comments to identify any technical or procedural improvements that may aid in future implementation.

Section 553(d) of the APA requires agencies to delay the effective date of final rules by a minimum of 30 days after the rule publishes in the Federal Register , subject to certain exceptions. For the same reasons stated above, CBP finds good cause under 5 U.S.C. 553(d)(3) to waive the 30-day delay in the rule's effective date. Specifically, CBP finds that a delayed effective date is unnecessary because this rule is an administrative, deregulatory rule that does not impose new obligations or alter substantive requirements. CBP assesses that trade members will not experience significant disruptions in adjusting to the revised requirements; thus, delaying the effective date of this rule would unnecessarily postpone operational improvements expected to reduce administrative errors, eliminate duplicate paperwork, and promote uniformity in the tonnage tax collection process. Immediate implementation will enable CBP and the trade community to utilize the benefits of these streamlined procedures without further delay. Moreover, this rule is a procedural rule. Because procedural rules are not substantive rules within the meaning of 5 U.S.C. 553(d), the delayed effective date requirement does not apply. For these reasons, CBP may forgo a 30-day delayed effective date.

Executive Orders 12866 (Regulatory Planning and Review) and 13563 (Improving Regulation and Regulatory Review) direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. Executive Order 14192 (Unleashing Prosperity Through Deregulation) directs agencies to significantly reduce the private expenditures required to comply with Federal regulations and provides that “any new incremental costs associated with new regulations shall, to the extent permitted by law, be offset by the elimination of existing costs associated with at least 10 prior regulations.”

The Office of Management and Budget (OMB) has not designated this rule a “significant regulatory action,” under section 3(f) of Executive Order 12866. Accordingly, OMB has not reviewed it.

This interim final rule is considered an Executive Order 14192 deregulatory action. We estimate that this rule generates $24,792 in net annualized cost savings at a 7% discount rate, discounted relative to year 2024, over a perpetual time horizon. We estimate that this rule would result in a total net deregulatory impact on CBP and trade members by simplifying tonnage tax calculations and reducing tax calculation errors, with only a small one-time development cost to update the electronic application that records vessels' tonnage tax histories. The present value of the positive net impact of the rule over Fiscal Years (FY) 2025-2035 would be $239,109 under a 3% discount rate or $195,555 under a discount rate of 7%, discounting to FY 2025. Annualized over the ten-year period FY 2025-2034, the net impact would be a positive $27,214 per year under a 3% discount rate or $26,021 per year under a 7% discount rate. The rule would also lead to an increase in transfers from trade members to the U.S. Government over FY 2025-2035 with a present value of $2,731,750 under a discount rate of 3% or $2,356,446 under a discount rate of 7%. In terms of annualized value over ten years, from FY 2025-2034, these present values translate to an increase in transfers by $310,917 or $313,556 per year under a discount rate of 3% or 7%, respectively.

Upon making entry in the United States, a vessel arriving from a foreign port or place is assessed a tonnage tax by CBP. 8 Generally, a vessel arriving from North America, the Caribbean, or a South American port on the Caribbean coast is subject to a rate of 2 cents per net ton, whereas a vessel arriving from elsewhere is subject to a rate of 6 cents per net ton. If the vessel has already made five payments at a given rate in the current tonnage year, it is exempt from further tonnage taxes at that rate for the remainder of the tonnage year. Currently, a vessel's tonnage year begins on the date the vessel makes entry in the United States without a tonnage year already in effect. The tonnage year then expires on the day preceding the corresponding date of the following year.

When processing at a port, the master of the vessel or vessel agent will present the certificates of payment of tonnage tax from recent entries to establish the start date of the current tonnage year. Upon payment of the tonnage tax on the current entry, the CBP officer will give the master or agent a new certificate of payment to record both the current payment and the start date of the tonnage year used for said payment. Before the recent automation of tonnage tax receipts, the certificate of payment was a paper CBP Form 1002 that included the control number of the cash receipt (CBP Form 368 or 368A). 9 Now, thanks to CBP's Mobile Collections and Receipts (MCR) initiative, CBP may instead issue an electronic receipt that is the combined equivalent of CBP Forms 1002 and 368. 10 The master or vessel agent may then use a printed copy of the receipt sent by email as a certificate of payment.

In FY 2023, 12,475 vessels made entry in the United States from a foreign port or place. 11 At 4.6 entries per vessel, vessels arriving from foreign ports made 57,513 entries in total. 12 Using CBP entrance data, we calculate that 56% of these entries were subject to a tonnage tax, with the remainder exempted for being made past the five-payment cap. Under the baseline tonnage year calculation method described further in the Transfers section below, the total tonnage tax payments in FY 2023 summed to $27,402,291, averaging $476 per entry. The mean vessel paid $2,197 in total, and the median vessel paid $1,108.

CBP sometimes applies an incorrect tonnage year start date when assessing tonnage taxes. After a mistake is made, CBP officers will sometimes continue to use the wrong tonnage year start date for the vessel's subsequent entries if the original error is not caught, which leads to more errors. Using the wrong tonnage year start date can lead to CBP's overcounting or undercounting the number of entries a vessel has made in the current tonnage year. As a vessel's tonnage tax obligation depends on the number of entries made in the current tonnage year, such an error can lead to an incorrect assessment of the tonnage tax. Upon finding an error in a vessel's recorded tonnage year start date, CBP must then take the time to look through the vessel's past receipts to determine when the vessel's true tonnage year began. Requesting additional tonnage tax payments from underbilled vessels and granting refunds to overbilled vessels are time-consuming for CBP. Such billing errors also make the current system confusing to the public.

The rule would align vessels' tonnage years with the fiscal year of the Federal Government, starting on October 1 of each year and ending on September 30 of the following year. The alignment would occur by cutting all current tonnage years short, ending them on September 30 and beginning the new tonnage year on October 1 of whichever year CBP begins the new process, assumed here to be FY 2026 (which begins on October 1, 2025). Switching vessels to a universal tonnage year would simplify the calculation of tonnage taxes and reduce billing errors. With fewer billing errors made, CBP would spend less time making requests for additional payments or handling requests for refunds and the trade would have more clarity as to the amount of money owed. The simplification would also allow CBP officers to calculate tonnage taxes more quickly. Vessel agents have expressed enthusiasm for this new tonnage year calculation method. 13

This regulatory impact analysis compares a baseline scenario and the regulatory scenario to measure the net impact of the rule. In the baseline, CBP would continue to calculate tonnage years the current way, as explained in the Background section. Under the regulatory scenario, CBP would align vessels' tonnage years with the fiscal year at the start of the FY 2026, as explained in the Purpose of Rule section. No technological or other regulatory changes in the future are expected to affect the frequency or costliness of CBP's errors in calculating tonnage tax payments in either scenario. In the Alternative Transition Options section, we analyze another way to transition to the new tonnage year calculation method.

The only costs from the rule would be the cost of redevelopment within the MCR application to account for the new universal tonnage year start date. A subject matter expert estimated on March 20, 2025, that redevelopment would take 80 hours of labor. Based on the average hourly pay of CBP employees of this type ($93.55/hour), 14 the one-time cost of redevelopment would be $7,484. The change in vessels' tonnage years would not increase administrative costs or compliance costs. The rule would increase the amount that trade members pay in tonnage taxes on net, but this effect counts as a transfer rather than as a cost because the change in tax expense represents a transfer of value within society and not an aggregate societal cost or cost savings. This effect is explained further in the Transfers section below.

We examined whether it is likely that vessels would alter their activity in response to a change in tonnage year calculation method. For example, under the rule, a vessel planning to make regular trips ( i.e., more than five) to the United States for the length of one year could reduce its tonnage taxes by beginning those trips at the start of the fiscal year of the Federal Government rather than part way through. Beginning the calculations at the start of the fiscal year would make the vessel's entries fall under one tonnage year rather than two, reducing the number of entries subject to a tonnage tax. By contrast, under the current method of calculating tonnage years, adjusting the start date of those trips would not reduce tonnage taxes. At only 2 cents or 6 cents per net ton, however, a change in how tonnage taxes are assessed would probably not cause any distortions in vessel activity. The annual revenue collected from the tonnage tax is only 2% as large as the revenue collected from the harbor maintenance fee for vessels arriving from foreign ports, which is itself 0.125% of the value of the cargo. Hence, tonnage taxes are on average about 0.0025% as much as the cargo value, or 1 cent for every $400 of cargo. The marginal tonnage tax rate may be somewhat higher than the average rate, but not by a significant amount. Therefore, we assume that the savings in tonnage taxes that a vessel operator could achieve by purposely delaying entry to the start of the new fiscal year would be smaller than the cost of the delay and that vessels' entrance timing would therefore not be distorted by the rule.

Aligning vessels' tonnage years with the fiscal year of the Federal Government would simplify the calculation of tonnage taxes, resulting in time savings for the Government. The complexity of the current definition of tonnage year makes the process of assessing tonnage tax longer and more error-prone than necessary. CBP officers sometimes miscalculate vessels' tonnage year start dates by mistake and sometimes due to a misunderstanding of the regulations. By restricting every tonnage year to start on October 1, the rule would leave no room for calculation errors or misconceptions regarding the tonnage year start date.

Under the existing process, the nature of the tonnage tax means that one error can beget multiple errors. If a CBP officer assigns a vessel the wrong tonnage year start date, then future tonnage year start dates will be wrong as well if the original error is not fixed. If a vessel's supposed tonnage year start date is later than its true tonnage year start date, the CBP officer may undercount the vessel's past tonnage tax payments and mistakenly assess a tonnage tax from which the vessel should be exempt. Alternatively, if the vessel's supposed tonnage year start date is earlier than its true tonnage year start date, the vessel may be underbilled. It takes time for CBP to fix all of these errors when they are finally discovered. If a vessel is found to have been overbilled, a vessel agent may submit to CBP a request for refund, and these requests take time for CBP to process, though we lack the data to estimate the time burden.

When a CBP officer discovers an error regarding a vessel's past tonnage taxes, such as a wrong tonnage year start date, the officer submits a service ticket to the Revenue Modernization Service Desk. CBP then looks through the vessel's tonnage tax payment history in Mobile Collections Receipts (MCR), where the information is recorded, and makes edits to correct for any errors. 15 Between November 14, 2024, and March 13, 2025, the Revenue Modernization Service Desk resolved 40 incident tickets. 16 Of these, 29 tickets required a correction to be made to the vessel's tonnage year start date. At the rate of 29 such tickets submitted over 120 days, we estimate that 88 tickets that at least partly involve an incorrect tonnage year start date will be submitted annually.

CBP believes the rule would prevent all issues stemming from miscalculated tonnage year start dates. Some of these tickets may be submitted anyway due to unrelated issues, such as errors related to the CBP User Fee, but a service ticket that only reports an issue with the CBP User Fee can be resolved more quickly than a ticket reporting both a CBP User Fee error and a tonnage tax error. We are unable to quantify the time savings that would result from preventing these tonnage tax errors, as we lack estimates for the average time it takes for a CBP officer to submit a ticket or for CBP to resolve a ticket, nor do we know how much this time burden would decline for service tickets that would no longer have any tonnage tax errors but would still have been submitted because of CBP User Fee errors.

Aligning vessels' tonnage years with the fiscal year would not only cut down on errors but also help CBP officers to calculate tonnage taxes more quickly. To calculate a vessel's tonnage tax obligation, a CBP officer must look at the vessel's payment history and count the tonnage tax payments made during the current tonnage year to check whether the vessel has reached its five-payment maximum at the relevant tonnage tax rate. Under the current definition of tonnage year, this process requires CBP officers to keep track of the vessel's particular tonnage year while counting the vessel's past payments. If every vessel had the same tonnage year, however, CBP officers could count each vessel's payments faster because they would not be slowed down by the need to keep track of the vessel's unique tonnage year start date. Instead, officers would always count the tonnage payments back to October 1 of the current fiscal year of the Federal Government, regardless of the vessel.

CBP asked three subject matter experts in the field to quantify how long it takes them to calculate a vessel's tonnage tax using the current tonnage year definition and how long the calculation takes when using the fiscal year as tonnage year. 17 The three subject matter experts gave estimates for the average time burden under the current regulation of 25, 35, and 45 seconds. Those experts' estimates using the fiscal year of the Federal Government as tonnage year were 15, 17, and 20 seconds, respectively. The time savings from the new tonnage year definition would thus average 17.7 seconds, a 50.5% reduction in the average time burden.

CBP officers calculate tonnage tax every time a vessel enters after arriving from a foreign port. Therefore, we use the number of entries from foreign ports to estimate the number of times CBP officers make these calculations per year. Table 1 presents the number of entrances made by vessels arriving from a foreign port from fiscal years 2012 to 2024. The number of entrances was not following any trend before the COVID-19 pandemic. The number then fell in FY 2020 but has since rebounded nearly to its FY 2019 level, as of FY 2024. Now that volumes have returned to pre-COVID-19 levels, we do not expect there to be any future trend in the number of entries by vessels arriving from foreign ports, and so we use 59,307, the annual count in FY 2024, as our estimate for all future years during the period of analysis.

If the rule would save CBP officers 17.7 seconds per tonnage calculation and this calculation is done for all 59,307 entrances of vessels arriving from a foreign port per year, then the rule would save a total of 291 hours per year in tonnage tax calculation. The average hourly pay for CBP officers is $99.33 per hour, 18 and so the value of these time savings would be $28,908 per year. It is possible that the savings could be even higher because the officers who provided the savings estimates are experts and may calculate tonnage taxes faster than most CBP personnel. If calculating tonnage taxes takes the average CBP officer more time than these sources, it is possible that the time savings from the new tonnage year definition are also larger for the average officer. Furthermore, these time estimates for tonnage tax calculations describe the time burdens for the simplest cases, but sometimes tonnage tax calculation can take much longer. One of the field sources later reported that a more complicated case took him 6 minutes to determine that a vessel owed no tonnage tax. 19 If the tonnage year change can significantly reduce the time burden of tonnage tax calculation in these more complicated cases, then the true time savings would be larger than our estimate.

The new tonnage year definition would also improve the vessel entrance process for trade members, who have expressed support for the rule change. By simplifying the calculation of tonnage year start dates, the rule would give vessel agents and vessel operators more clarity on whether a given entry will require a tonnage tax payment. Because CBP would also make fewer billing errors, trade members would spend less time checking for errors in the tonnage tax assessment and challenging CBP's calculations. Due to the difficulty of estimating this time burden, we cannot quantify the cost savings to trade members.

In addition to changing vessels' tonnage years, the rule would also modify the regulations regarding receipts for tonnage taxes and light money. CBP officers typically use MCR to create electronic receipts for tonnage tax payments as well as light money payments. These electronic receipts are the combined equivalent of CBP Forms 368 and 1002. On the rare occasion when CBP does not use the electronic MCR application, CBP instead issues the paper CBP Forms 368 and 1002, in accordance with current regulation. The rule would modify the regulations so that, on occasions when MCR is not used, CBP would not necessarily have to issue both CBP Forms 368 and 1002. Instead, a CBP officer could issue just CBP Form 368. This change would save time, as the officer would not need to issue CBP Form 1002 and the vessel agent would not need to hold onto a copy of CBP Form 1002. We expect that this will save a positive but negligible amount of time for CBP and would save a small amount of storage costs for vessel agents. We request comment on the savings to vessel agents of no longer needing to maintain copies of the CBP Form 1002 in their records.

Table 2 displays the quantified cost savings from the rule, which are the annual time savings to CBP officers from calculating tonnage years more quickly. The tonnage year start date change would not take effect until the start of FY 2026, but we include FY 2025 for consistency with other sections of this analysis. The present value of these savings over FY 2026-2035 would be $246,592 under a 3% discount rate or $203,039 under a 7% discount rate, discounted to base year FY 2025. In addition to these cost savings, there are others that are harder to quantify. CBP would spend less time fixing errors in MCR that stem from incorrect tonnage year start dates and less time processing requests for refunds from vessels that were overbilled due to tonnage tax miscalculation. Vessel agents would also face less uncertainty regarding their tonnage tax obligations and therefore spend less time checking for errors in their tonnage tax payments. Finally, CBP officers could be trained more quickly, as CBP would not have to spend as much time explaining how tonnage taxes work because the definition of tonnage year would be less complicated.

Aligning vessels' tonnage years with the fiscal year of the Federal Government would increase Government revenue by raising the share of entries that are subject to a tonnage tax. This effect counts as a transfer rather than as a cost or cost savings because the change in tax expense represents a transfer of value within society and not an aggregate societal cost or benefit. Therefore, the size of the transfer, reported below, would not affect the net impact of the rule change. To estimate the effect of the rule on government revenue, we applied the baseline and regulatory tonnage year calculation methods to the same historical entrance data. After projecting future tonnage tax revenue in each case, we then estimate that the rule would increase government revenue by an annualized value of $310,917 under a discount rate of 3% or $313,556 under a discount rate of 7%, annualized over ten years starting at base year FY 2025.

We use historical vessel entrance data spanning FY 2017 to FY 2023 to compute which entries would be taxable under which tonnage year calculation method. In the entrance data, some observations are listed as having zero net tonnage, but CBP believes that most zero-tonnage observations are inaccurate. Therefore, among vessels with zero net tonnage listed on some entries and positive net tonnage listed on other entries, we substituted each vessel's smallest positive value of net tonnage for its zero net tonnage values. CBP's entrance data does not contain the tonnage tax rate that an entry was or would be subject to, but the data does contain the vessel's last port. We assume for these calculations that a vessel's last port is where the cargo was laden and assign the tonnage tax rate accordingly. All vessels arriving from another U.S. port are therefore assumed to be exempt from the tonnage tax. To the extent that the vessel's last port is different from where the cargo was laden, the tonnage tax rate could differ. According to a smaller CBP dataset containing more information about tonnage tax payments, most vessels are taxed at the tonnage tax rate that would apply if their cargo were laden at the most recent foreign port. Hence, this assumption is unlikely to significantly affect the results of the analysis.

Under the regulatory tonnage year calculation method, each vessel's tonnage year start date is set to October 1 of each fiscal year. To get the start dates of vessels' first tonnage year under the baseline, we use each vessel's earliest filing date in the FY 2017-2023 entrance data. After determining each vessel's first tonnage year start date, we calculate the start of all later tonnage years according to the baseline tonnage year calculation method. CBP does have records of tonnage tax payments, which include additional information not found in the basic entrance data such as the start date of each entry's tonnage year under the baseline and the applicable tonnage tax rate. However, if we were to compare the tonnage tax payments that would have occurred if the rule had been in place to the actual baseline tonnage tax records, the comparison between the baseline and regulatory scenarios would be clouded by differences in calculation errors and information constraints. Recalculating the baseline tonnage year start dates and assigning the tax rates using only the basic entrance data allows us to isolate the effect of the tonnage year calculation method when comparing tonnage tax payments under the baseline and regulatory scenarios.

After calculating the start dates of all vessels' tonnage years under both the baseline and regulatory tonnage year calculations, we calculate the annual mean net tonnage of taxed entries and the annual number of taxed entries at each tax rate under each calculation method, shown in Table 3 and Table 4. We use these historical series to form projections from FY 2026 to 2035. To project the future mean net tonnages of taxed entries for both rates, under both the baseline and regulatory scenarios, we calculated the compound annual growth rate of each series from FY 2017-2023 and use these as the estimates for future growth rates.

The mean net tonnage of entries taxed at the 2-cent rate is projected to grow at 3.75% per year under the baseline and 3.37% under the regulatory scenario. For 6-cent entries, the growth will be slower, at 1.46% and 1.34% under the baseline and regulatory scenarios, respectively. Table 5 shows the projection of mean net tonnage for each series from FY 2026-2035.

This rule makes a change to Item 33 of the Schedule of Fees by adding a $1 fee to register for the DV lottery in addition to the $330 Diversity Visa Application fee. The cost of managing the DV lottery historically has been included in the Diversity Visa Application fee as authorized by law. See 8 U.S.C. 1153 (note) (noting that the Diversity Visa Application fee “may be set at a level that will ensure recovery of the cost to the Department of State of allocating visas under such section, including the cost of processing all applications thereunder”). By creating a new fee for the lottery registration, the Department will more fairly put the cost of managing the lottery on those who register for it. This change will also help to reduce specious registrations by actors seeking to exploit unsuspecting potential entrants.

To effect this change to the DV program, the Department is also amending 22 CFR 42.33(b)(3) by deleting the following sentence: “No fee will be collected at the time of submission of a petition, but a processing fee may be collected at a later date, as provided in paragraph (i) of this section.” In addition, the Department is amending 22 CFR 42.33(i) to note that a registration fee will be collected through an authorized U.S. Government payment portal at the time of registration, prior to submission and completion of the registration.

Sec. 636 of Public Law 104-208, div. C, Title VI, 110 Stat. 3009-703, reproduced at 8 U.S.C. 1153 (note), authorizes the Secretary of State to collect and retain a “Diversity Immigrant Lottery Fee.” Under this fee authority, the Secretary of State may establish and retain a fee to recover the costs of “allocating visas” described in 8 U.S.C. 1153, i.e., running the DV lottery pursuant to 8 U.S.C. 1154(a)(1)(I), and to recover the costs of “processing applications” for diversity immigrant visas submitted by selectees of the lottery. Per the authority, the Department is permitted but not required to build the costs of running the lottery into the DV application fee. The DV application fee was last adjusted in 2012, when it was lowered from $440 to $330.

In addition to the specific DV application fee authority, the Department derives the general authority to establish cost-based consular fees from the general user charges statute, 31 U.S.C. 9701. See, e.g., 31 U.S.C. 9701(b)(2)(A) (“The head of each agency . . . may prescribe regulations establishing the charge for a service or thing of value provided by the agency . . . based on . . . the costs to the government.”). The President also has the power to set the amount of fees to be charged for consular services provided at U.S. embassies and consulates abroad pursuant to 22 U.S.C. 4219, and has delegated this authority to the Secretary of State, E.O. 10718 (June 27, 1957). The Department is relying on these authorities to establish this fee to register for the DV lottery, and is shifting the costs of running the lottery from the DV application fee to the $1 lottery registration fee.

In the absence of a specific statutory fee retention authority, fees collected for consular services must be deposited into the general fund of the Treasury pursuant to 31 U.S.C. 3302(b).

The Department is creating a $1 fee to register for the DV lottery program. This $1 fee reflects the operational costs of running the annual DV lottery. These include the annual review and update of the systems required to collect the lottery form submissions, data storage, automated randomized selection of lottery winners, and associated security reviews. The Diversity Visa application fee will continue to cover all other costs associated with administering the Diversity Visa program. The costs associated with the lottery that are currently included in the DV application fee would be removed from that fee, but the overall cost per accepted applicant is low enough that the DV fee would not be immediately reduced. The Department reviews consular fees periodically, including through an annual update to its Cost of Service Model, to determine appropriateness of each fee consistent with OMB guidance. The Department will review the DV fee in its next model update and adjust the DV application fee if and as needed at that time.

Separating the DV lottery process from the DV application process more fairly places the cost burden of the lottery registration on individuals who seek the benefit of gaining access to the DV lottery instead of charging the small percentage of successful registrants for the increased costs associated with administering the program for all registrants. With certain exceptions—such as the reciprocal nonimmigrant visa issuance fee—the Department generally sets consular fees at an amount calculated to achieve recovery of the costs to the U.S. government of providing the consular service, in a manner consistent with general user charges principles, regardless of the specific statutory authority under which the fees are authorized. As set forth in OMB Circular A-25, as a general policy, each recipient should pay a reasonable user charge for government services, resources, or goods from which he or she derives a special benefit, at an amount sufficient for the U.S. government to recover the full costs to it of providing the service, resource, or good. See OMB Circular No. A-25, sec. 6(a)(2)(a). The OMB guidance covers all Federal Executive Branch activities that convey special benefits to recipients beyond those that accrue to the general public. See id., sections 4(a), 6(a)(1).

The Department intends to implement this rule 30 days after date of publication.

The Department asserts the “foreign affairs function” exemption to the Administrative Procedure Act (APA) (5 U.S.C. 553(a)(1)). This is consistent with the Attorney General's opinion  1 that was issued concurrent with the passage of the APA that

The subject matter of this final rule involves the collection of visa fees through the Diversity Visa program. The administration of this program is a foreign affairs function of the United States.

By requiring the $1 fee for all aliens who register for the Diversity Visa program, the Department is shifting the burden of the registration and random selection process to the group that seeks the benefit of gaining access to the program, instead of only charging the small percentage of successful registrants, who will still be responsible for the costs associated with administering the remainder of the program. This is a fairer way to administer the DV visa program. Visas are issued by the Department of State to foreign citizens in foreign countries. Accordingly, this rule is properly viewed as one that “clearly and directly involve[s] activities or actions characteristic to the conduct of international relations.” Capital Area Immigrants' Rights Coal. v. Trump, 471 F. Supp. 3d 25, 53 (D.D.C. 2020); E.B. v. U.S. Dep't of State, 583 F. Supp. 3d 58, 64 (D.D.C. 2022). The D.C. Circuit likely would apply this test as well, as that court has adopted a direct-involvement test for the analogous benefits exception contained in the same subsection of the APA. Crafting visa policy for the United States is inherently a foreign affairs function under any test.

In addition, although the text of the Administrative Procedure Act does not require an agency invoking this exemption to show that such procedures may result in “definitely undesirable international consequences,” some courts have required such a showing. E.g., Yassini v. Crosland, 618 F.2d 1356, 1360 n.4 (9th Cir. 1980). As noted above, the collection of this fee is intended in part to help to reduce specious registrations by actors seeking to exploit unsuspecting potential entrants. Because the publication of this rule for notice and comment would provide opportunity for such actors to modify their methods prior to the first DV registration in which the fee will be implemented, such publication would more than likely result in such undesirable international consequences. Accordingly, the promulgation of a fee to be collected at the time of registration for the DV program involves an inherently foreign affairs function of the Department of State.

In addition, consistent with his statutory authority, 2 the Secretary of State has determined that all policy related to visa operations and issuance, among other matters, constitutes a foreign affairs function of the United States under the Administrative Procedure Act (5 U.S.C. 553). 3

This rule would not regulate “small entities” as that term is defined in 5 U.S.C. 601(6) and as such would not have a significant economic impact on a substantial number of small entities. The Department affirms that this proposed rule will not have a significant economic impact on a substantial number of small entities as defined in 5 U.S.C. 601(6).

This rule will not result in the expenditure by state, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any year, and it will not significantly or uniquely affect small governments. Therefore, no actions were deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995, 2 U.S.C. 1501-1504.

This rule is not a major rule as defined by 5 U.S.C. 804(2).

The Department has reviewed this rule to ensure its consistency with the regulatory philosophy and principles set forth in the Executive Orders. OMB has determined that this rule is not significant under Executive Order 12866.

The Department is establishing this fee in accordance with 31 U.S.C. 9701 and OMB Circular A-25, as described in more detail above. See, e.g., 31 U.S.C. 9701(b)(2)(A) (“The head of each agency . . . may prescribe regulations establishing the charge for a service or thing of value provided by the agency . . . based on . . . the costs to the Government.”).

Details of the proposed fee change are as follows:

The Department of State anticipates that demand for the DV lottery may decrease in part due to these fee changes.

This regulation will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with section 6 of Executive Order 13132, it is determined that this rule does not have sufficient federalism implications to require consultations or warrant the preparation of a federalism summary impact statement. The regulations implementing Executive Order 12372 regarding intergovernmental consultation on federal programs and activities do not apply to this regulation.

The Department has determined that this rulemaking will not have tribal implications, will not impose substantial direct compliance costs on Indian tribal governments, and will not preempt tribal law. Accordingly, the requirements of Executive Order 13175 do not apply to this rulemaking.

This rule does not impose any new reporting or record-keeping requirements subject to the Paperwork Reduction Act 44 U.S.C. Chapter 35.

This rule is not an Executive Order 14192 regulatory action because it is being issued with respect to an immigration-related function of the United States. The rule's primary direct purpose is to implement or interpret the immigration laws of the United States (as described in INA sec. 101(a)(17), 8 U.S.C. 1101(a)(17)) or any other function performed by the U.S. Federal Government with respect to aliens.

Accordingly, for the reasons stated in the preamble, the State Department amends 22 CFR parts 22 42 as follows:

This document sets forth amendments to the Income Tax Regulations (26 CFR part 1) under sections 401(k), 403(b), and 414(v) of the Internal Revenue Code (Code) relating to catch-up contributions. These final regulations are issued by the Secretary of the Treasury or the Secretary's delegate (Secretary) under the express delegations of authority in sections 401(m)(9), 414(v)(7)(D), and 7805(a) of the Code.

Section 401(m)(9) provides, in part, that “[t]he Secretary shall prescribe such regulations as may be necessary to carry out the purposes of [section 401(m) and (k)].” Section 414(v)(7)(D) provides a specific delegation of authority with respect to the requirements of section 414(v)(7)(A), stating, “[t]he Secretary may provide by regulations that an eligible participant may elect to change the participant's election to make additional elective deferrals if the participant's compensation is determined to exceed the limitation under [section 414(v)(7)(A)] after the election is made.” Section 7805(a) provides that “the Secretary shall prescribe all needful rules and regulations for the enforcement of [the Code], including all rules and regulations as may be necessary by reason of any alteration of law in relation to internal revenue.”

This document sets forth amendments to the Income Tax Regulations under section 414(v) of the Code. Section 414(v) permits a retirement plan to allow catch-up eligible participants to make additional elective deferrals that are catch-up contributions and sets forth requirements relating to those contributions. 1 These final regulations amend the regulations under section 414(v) to reflect changes to the catch-up contribution requirements for certain catch-up eligible participants pursuant to sections 109, 117, and 603 of Division T of the Consolidated Appropriations Act, 2023, Public Law 117-328, 136 Stat. 4459 (2022), known as the SECURE 2.0 Act of 2022 (SECURE 2.0 Act).

This document also sets forth conforming amendments to the regulations under sections 401(k) and 403(b) of the Code that reflect section 603 of the SECURE 2.0 Act.

Section 414(v)(1) of the Code provides that an applicable employer plan will not be treated as failing to meet any requirement of the Code solely because it permits an eligible participant to make additional elective deferrals (as defined in section 414(v)(6)(B)) in any plan year. “Applicable employer plan” is defined in section 414(v)(6)(A) to mean a qualified plan under section 401(a) (qualified plan), a plan under which amounts are contributed by an individual's employer for an annuity contract described in section 403(b) (section 403(b) plan), an eligible deferred compensation plan under section 457 of an eligible employer described in section 457(e)(1)(A) (eligible governmental 457(b) plan), 2 an arrangement meeting the requirements of section 408(k) (SEP arrangement), and an arrangement meeting the requirements of section 408(p) (SIMPLE IRA plan). Under section 414(v)(5), an eligible participant is a participant who is generally eligible to make elective deferrals under an applicable employer plan, who would attain age 50 by the end of the taxable year, and with respect to whom no further elective deferrals may (without regard to section 414(v)) be made to the plan for the plan year (or other applicable year) by reason of a limitation or restriction listed in section 414(v)(3) or a comparable limitation or restriction included in the terms of the plan.

Under section 414(v)(2)(A), the amount of additional elective deferrals that a plan may permit a participant to make pursuant to section 414(v)(1) for a taxable year is limited to the lesser of: (1) the applicable dollar amount under section 414(v)(2)(B) (referred to as the applicable dollar catch-up limit), and (2) the excess (if any) of the participant's compensation (as defined in section 415(c)(3)) for the year over any other elective deferrals of the participant for such year that are made without regard to section 414(v). Section 414(v)(2)(B)(i) provides the applicable dollar catch-up limit for an applicable employer plan other than a plan described in section 401(k)(11) (SIMPLE 401(k) plan) or a SIMPLE IRA plan. Section 414(v)(2)(B)(ii) provides the applicable dollar catch-up limit for a SIMPLE 401(k) plan or a SIMPLE IRA plan (collectively referred to as SIMPLE plans). Section 414(v)(2)(C) provides that the applicable dollar catch-up limits under section 414(v)(2)(B)(i) and (ii) are subject to annual adjustment based on changes in the cost of living. Section 414(v)(2)(D) provides that, for purposes of section 414(v)(2), all applicable employer plans, other than eligible governmental 457(b) plans, that are maintained by the same employer (as determined under section 414(b), (c), (m), or (o)) are treated as a single plan, and all eligible governmental 457(b) plans that are maintained by the same employer are treated as a single plan.

Under section 414(v)(3)(A)(i), a catch-up contribution is not, with respect to the year in which the contribution is made, subject to certain otherwise applicable limitations, including those contained in section 401(a)(30) (limiting a participant's elective deferrals during a calendar year to the amount permitted under section 402(g)), section 403(b) (including the requirement under section 403(b)(1)(E) that a contract purchased under a salary reduction agreement must meet the requirements of section 401(a)(30)), and section 457(b)(2) applied without regard to any increase under section 457(b)(3) (limiting a participant's elective deferrals for a taxable year to the applicable dollar amount in section 457(e)(15), or if less, 100 percent of the participant's includible compensation). Under section 414(v)(3)(B), in the case of any catch-up contribution to a plan, except as provided in section 414(v)(4), the plan shall not be treated as failing to meet the requirements of sections 401(a)(4), 401(k)(3), 401(k)(11), 403(b)(12), 408(k), 410(b), or 416 by reason of the making of (or the right to make) the catch-up contribution.

Section 414(v)(4) provides that an applicable employer plan is treated as failing to meet the nondiscrimination requirements under section 401(a)(4) with respect to benefits, rights, and features unless the plan allows all catch-up eligible participants to make the same election with respect to catch-up contributions. For purposes of section 414(v)(4), all plans maintained by employers that are treated as a single employer under section 414(b), (c), (m), or (o) are treated as one plan (with the exception of a plan described in section 410(b)(6)(C)(i) for the duration of the transition period described in section 410(b)(6)(C)(ii) with respect to that plan).

Section 414(v) was added to the Code by section 631 of the Economic Growth and Tax Relief Reconciliation Act of 2001, Public Law 107-16, 115 Stat. 38. The Department of the Treasury (Treasury Department) and the IRS issued comprehensive regulations under section 414(v) in 2003 (TD 9072, 68 FR 40510). Subsequently, provisions relating to catch-up contributions under section 414(v) were incorporated into regulations under sections 401(k), 403(b), and 457(b).

For taxable years beginning after December 31, 2024, section 109 of the SECURE 2.0 Act amends section 414(v)(2) of the Code to increase the applicable dollar catch-up limit under section 414(v)(2)(B)(i) and (ii) in the case of a catch-up eligible participant who attains age 60, 61, 62, or 63 during the taxable year. For such a participant in an applicable employer plan other than a SIMPLE plan, the increased applicable dollar catch-up limit is 150 percent of the otherwise applicable dollar catch-up limit under section 414(v)(2)(B)(i) in effect for 2024. 3 For such a participant in a SIMPLE plan, the increased applicable dollar catch-up limit is 150 percent of the otherwise applicable dollar catch-up limit under section 414(v)(2)(B)(ii) in effect for 2025. 4 In either case, for a year beginning after December 31, 2025, the increased applicable dollar catch-up limit is subject to adjustment to reflect changes in the cost of living, in accordance with the last sentence of section 414(v)(2)(C).

A SIMPLE plan is an alternative plan design under which employees of an eligible employer as defined in section 408(p)(2)(C)(i) (that is, generally, an employer that had no more than 100 employees who received at least $5,000 of compensation from the employer for the preceding calendar year) are permitted to elect to have salary reduction contributions (or elective contributions, in the case of a SIMPLE 401(k) plan) made on their behalf. 5 Among other things, section 117 of the SECURE 2.0 Act amends section 414(v)(2) of the Code to increase the applicable dollar catch-up limit under section 414(v)(2)(B)(ii) for SIMPLE plans sponsored by certain eligible employers who are described in section 408(p)(2)(E)(iv). 6 The increased applicable dollar catch-up limit is available automatically to a SIMPLE plan sponsored by an eligible employer described in section 408(p)(2)(E)(iv) that had no more than 25 employees who received at least $5,000 of compensation from the employer for the preceding calendar year. Other eligible employers described in section 408(p)(2)(E)(iv) may make an election for the increased applicable dollar catch-up limit to apply and, if the election is made, the employer must make additional matching or nonelective contributions.

The increased applicable dollar catch-up limit, which applies to taxable years beginning after December 31, 2023, is 110 percent of the otherwise applicable dollar catch-up limit under section 414(v)(2)(B)(ii) for calendar year 2024. For a year beginning after December 31, 2024, the increased applicable dollar catch-up limit is subject to adjustment to reflect changes in the cost of living, in accordance with section 414(v)(2)(C)(ii).

Section 603(a) of the SECURE 2.0 Act amends section 414(v) of the Code to add section 414(v)(7). Section 414(v)(7)(A) sets forth the requirement that catch-up contributions made by certain catch-up eligible participants must be designated Roth contributions (the Roth catch-up requirement). Specifically, under section 414(v)(7)(A), in the case of a catch-up eligible participant whose wages as defined in section 3121(a) (that is, wages for purposes of the Federal Insurance Contributions Act (FICA), codified at subtitle C, chapter 21 of the Code, or FICA wages) for the preceding calendar year from the employer sponsoring the plan exceeded $145,000, section 414(v)(1) applies only if any catch-up contributions made by the participant are designated Roth contributions (as defined in section 402A(c)(1)).

Section 414(v)(7)(B) provides that, in the case of an applicable employer plan with respect to which section 414(v)(7)(A) applies to any participant for a plan year, section 414(v)(1) does not apply to the plan unless the plan provides that any catch-up eligible participant may make catch-up contributions as designated Roth contributions. Section 414(v)(7)(C) provides that section 414(v)(7)(A) does not apply to SEP arrangements or SIMPLE IRA plans. Under section 414(v)(7)(D), the Secretary may issue regulations providing that a catch-up eligible participant may elect to change the participant's election to make catch-up contributions if the participant's compensation is determined to exceed the wage limitation under section 414(v)(7)(A) after the election is made. Under section 414(v)(7)(E), for taxable years beginning after December 31, 2024, the wage limitation is adjusted for changes in the cost of living (the wage limitation, as adjusted, is referred to as the Roth catch-up wage threshold). 7

Section 603(b) of the SECURE 2.0 Act includes conforming amendments with respect to section 603(a). Section 603(b)(1) of the SECURE 2.0 Act strikes section 402(g)(1)(C) of the Code. Prior to its elimination, section 402(g)(1)(C) provided that a catch-up eligible participant's gross income did not include elective deferrals in excess of the applicable dollar amount under section 402(g)(1)(B) to the extent that the amount of those elective deferrals did not exceed the applicable dollar catch-up limit under section 414(v)(2)(B)(i) for the taxable year (without regard to the treatment of the elective deferrals by an applicable employer plan under section 414(v)).

Section 603(b)(2) of the SECURE 2.0 Act amends section 457(e)(18)(A)(ii) of the Code and, pursuant to this amendment, if a catch-up eligible participant's limit under section 457(e)(18) is greater than the limit under section 457(b)(3) (determined without regard to section 457(e)(18)), then a portion of the catch-up contributions made to the eligible governmental 457(b) plan by the participant is required to be designated Roth contributions. The portion of the catch-up contributions that is subject to this Roth requirement is the amount by which the sum of the limits under sections 457(b)(2) and 414(v)(2)(B)(i) exceeds the maximum permitted contribution set forth in section 457(b)(3) (determined without regard to section 457(e)(18)).

Under section 603(c) of the SECURE 2.0 Act, the amendments made by section 603 of the SECURE 2.0 Act apply to taxable years beginning after December 31, 2023.

In August 2023, the Treasury Department and the IRS issued Notice 2023-62, 2023-37 IRB 817. Notice 2023-62 clarifies that, despite the elimination of section 402(g)(1)(C) of the Code under section 603(b)(1) of the SECURE 2.0 Act, applicable employer plans may, for taxable years beginning after December 31, 2023, continue to permit catch-up eligible participants to make elective deferrals that exceed the applicable dollar amount under section 402(g)(1)(B) of the Code (or deferrals that exceed the applicable dollar amount under section 457(e)(15)) if those contributions in excess of the applicable dollar amount satisfy the requirements for catch-up contributions under section 414(v). In addition, pursuant to Notice 2023-62, the first two taxable years beginning after December 31, 2023, are regarded as an administrative transition period with respect to the Roth catch-up requirement. During the administrative transition period, catch-up contributions made by a participant who is subject to the Roth catch-up requirement will be treated as satisfying the requirements of section 414(v)(7)(A), even if the contributions are not designated Roth contributions.

Notice 2023-62 also summarizes anticipated guidance from the Treasury Department and the IRS with respect to the implementation of section 603 of the SECURE 2.0 Act as follows: (1) the Roth catch-up requirement would not apply in the case of a catch-up eligible participant who did not have FICA wages for the preceding calendar year from the employer sponsoring the plan; (2) in the case of a catch-up eligible participant who is subject to the Roth catch-up requirement, a plan administrator and an employer would be permitted to treat an election by the participant to make catch-up contributions on a pre-tax basis as an election by the participant to make catch-up contributions that are designated Roth contributions; and (3) a catch-up eligible participant's FICA wages for the preceding calendar year from one participating employer in an applicable employer plan that is maintained by more than one employer (including a multiemployer plan) would not be aggregated with the participant's FICA wages for the preceding calendar year from another participating employer in the plan for purposes of determining whether the participant's FICA wages for that year exceeded the Roth catch-up wage threshold. The notice requested comments with respect to the anticipated guidance summarized in the notice, additional matters under consideration relating to a plan without a qualified Roth contribution program, and, more generally, the provisions of section 603 of the SECURE 2.0 Act.

A notice of proposed rulemaking (REG-101268-24) containing proposed regulations that would amend the regulations under sections 401(k), 403(b), and 414(v) to reflect changes to the catch-up contribution requirements for certain catch-up eligible participants pursuant to sections 109, 117, and 603 of the SECURE 2.0 Act was published in the Federal Register on January 13, 2025 (90 FR 2645). Comments received in response to Notice 2023-62 were considered in the preparation of the proposed regulations. Nineteen comments were received on the proposed regulations, and a public hearing was held on April 7, 2025.

After consideration of the comments received in response to the notice of proposed rulemaking and testimony at the public hearing, the proposed regulations are adopted by this Treasury decision with certain changes described in the Summary of Comments and Explanation of Revisions section of this preamble.

This Summary of Comments and Explanation of Revisions addresses the significant comments regarding catch-up contributions under section 414(v) of the Code that the Treasury Department and the IRS received in response to the proposed regulations and describes the revisions included in the final regulations. Rules under the proposed regulations that are included in the final regulations without change generally are not discussed in this Summary of Comments and Explanation of Revisions.

In order to facilitate compliance with the Roth catch-up requirement under section 414(v)(7)(A), proposed § 1.401(k)-1(f)(5)(iii) generally would permit a plan to provide, for taxable years beginning after December 31, 2023, that a participant who is subject to the Roth catch-up requirement is deemed to have irrevocably designated any catch-up contributions as designated Roth contributions in accordance with the requirements of existing § 1.401(k)-1(f)(1)(i). However, in accordance with section 414(v)(7)(D), proposed § 1.401(k)-1(f)(5)(iv) would provide that the application of a deemed Roth catch-up election to a participant would be conditioned on the participant having an effective opportunity (determined in accordance with existing § 1.401(k)-1(e)(2)(ii), which applies a facts and circumstances test) to make a new election that is different than the deemed election. The proposed regulations also proposed to amend § 1.403(b)-3(c)(1) to incorporate proposed § 1.401(k)-1(f)(5)(iii) and (iv), among other provisions.

Commenters requested that the final regulations permit a plan to continue applying a deemed Roth catch-up election to a participant in certain circumstances in which the participant is no longer subject to the Roth catch-up requirement. One commenter requested that, in the case of a participant who ceases to be subject to the Roth catch-up requirement during a taxable year due to a transfer of employment to another participating employer, a plan be permitted to continue applying the deemed Roth catch-up election to the participant until the end of the taxable year. Similarly, commenters requested that the final regulations permit a plan to continue applying the deemed Roth catch-up election to a participant for a taxable year based on the FICA wages reported on the participant's Form W-2 (Wage and Tax Statement) for the preceding calendar year, even if the participant's FICA wages for the preceding calendar year are later determined not to exceed the Roth catch-up wage threshold.

In response to these comments, the final regulations clarify the conditions set forth in proposed § 1.401(k)-1(f)(5)(iv) by providing that the deemed election described in § 1.401(k)-1(f)(5)(iii) must cease to apply to an employee within a reasonable period of time following the date on which: (1) the employee ceases to be subject to the requirement under section 414(v)(7) to make any catch-up contributions as designated Roth contributions, or (2) an amended Form W-2 is filed or furnished to the employee indicating that the employee is not subject to the requirement under section 414(v)(7) to make any catch-up contributions as designated Roth contributions. Accordingly, catch-up contributions that were designated as Roth contributions pursuant to the deemed election before the end of the reasonable period of time referred to in the prior sentence do not need to be recharacterized as pre-tax catch-up contributions.

One commenter requested clarification regarding the effective opportunity requirement under proposed § 1.401(k)-1(f)(5)(iv), including whether a notice requirement applies and how any notice requirement could be satisfied. The final regulations retain the proposed rule providing that whether a participant has an effective opportunity is determined under existing § 1.401(k)-1(e)(2)(ii), which applies a facts and circumstances test. However, the determination of whether certain facts and circumstances would satisfy the requirements of § 1.401(k)-1(e)(2)(ii) is outside the scope of the final regulations.

One commenter requested that the final regulations permit a plan to apply a deemed Roth catch-up election to a participant who is subject to the Roth catch-up requirement if the participant's elective deferrals for the taxable year have reached the section 401(a)(30) limit without regard to any designated Roth contributions that the participant made earlier in the taxable year.

The final regulations retain the proposed rule that a plan may provide that an employee who is subject to the Roth catch-up requirement is deemed to have irrevocably designated any elective deferrals that are catch-up contributions as designated Roth contributions. As described in section III.B.1 of this Summary of Comments and Explanation of Revisions (“Designated Roth contributions that are treated as catch-up contributions for purposes of the Roth catch-up requirement”), the final regulations also retain the proposed rule in § 1.414(v)-2(b)(1), which provides that an elective deferral that is treated as a catch-up contribution at the time of deferral (for example, an elective deferral that is a catch-up contribution because it exceeds the section 401(a)(30) limit on elective deferrals) is required to be a designated Roth contribution only to the extent the participant has not previously made elective deferrals that are designated Roth contributions during the taxable year equal to the applicable dollar catch-up limit under § 1.414(v)-1(c)(2). However, this commenter's request to be permitted to deem elective deferrals as designated Roth contributions once total elective deferrals have reached the section 401(a)(30) limit has been incorporated into the final rules in § 1.414(v)-2(c)(3)(i)(B) regarding the practices and procedures that are necessary in order for a plan to use the Form W-2 or in-plan Roth rollover correction method to correct a pre-tax elective deferral that exceeds a statutory limit, as explained further in sections III.B.1 and III.C.3.a of this Summary of Comments and Explanation of Revisions (“Prerequisite to correct certain section 414(v)(7) failures under the new correction methods”).

One commenter requested that a plan be permitted to apply a deemed Roth catch-up election in the case of a participant who is permitted under the plan to make a separate election to treat a portion of the participant's elective deferrals as catch-up contributions during each payroll period without regard to whether the participant has already made elective deferrals equal to the section 401(a)(30) limit (referred to as a separate election plan). Assuming this deeming is permitted, the commenter also requested that no correction be required if such an elective deferral is deemed to be made as a designated Roth contribution but is later determined not to be a catch-up contribution.

Under existing § 1.414(v)-1(c)(3), the determination of whether an elective deferral is a catch-up contribution is made as of the last day of the plan year (or in the case of section 415, as of the last day of the limitation year), except that, with respect to elective deferrals in excess of an applicable limit that is tested on the basis of the taxable year or calendar year (for example, the section 401(a)(30) limit on elective deferrals), the determination of whether such elective deferrals are treated as catch-up contributions is made at the time they are deferred. Thus, an additional elective deferral that exceeds an employer-provided limit (for example, a plan limit on the amount of a participant's compensation that may be deferred for each payroll period) would not be determined to be a catch-up contribution under the existing regulations until the last day of the plan year (regardless of any earlier treatment as catch-up contributions pursuant to a participant election). The final regulations do not make changes to § 1.414(v)-1(c)(3).

However, for a separate election plan (including a plan utilizing the proration-of-limit design described in existing § 1.414(v)-1(e)(1)(ii)(A)), § 1.401(k)-1(f)(5)(v) of the final regulations permits the plan to apply a separate-election deemed Roth catch-up election to a participant's elective deferrals that the participant elects to treat as catch-up contributions. As with any application of a deemed Roth catch-up election to a participant, the application in this case would be conditioned on the participant having an effective opportunity (determined in accordance with existing § 1.401(k)-1(e)(2)(ii)) to make a new election that is different than the deemed election. Thus, in the case of a participant who is made subject to a separate-election deemed Roth catch-up contribution election and does not make a different election, the plan is not required to recharacterize as pre-tax any of the participant's elective deferrals treated as Roth catch-up contributions pursuant to the deemed Roth election, even if these amounts are determined not to be catch-up contributions under § 1.414(v)-1(c)(3).

One commenter requested that the final regulations provide guidance on whether, in order to apply a deemed Roth catch-up election to a participant, the deemed Roth catch-up election must be set forth in a plan amendment (and, if so, requested additional time following the publication of the final regulations for an employer to adopt the plan amendment). Under the final regulations, as under the proposed regulations, a plan generally may provide that an employee who is subject to the Roth catch-up requirement is deemed to have irrevocably designated any elective deferrals that are catch-up contributions as designated Roth contributions. Thus, in order for a plan to apply a deemed Roth catch-up election to a participant, the deemed Roth catch-up election must be set forth in the plan document.

Although the final regulations do not address the deadline for this plan amendment, under Q&A J-1 of Notice 2024-2, the deadline under section 501 of the SECURE 2.0 Act to amend a plan (for required, integral, and discretionary plan amendments) with respect to the applicable provisions of section 603 of the SECURE 2.0 Act, or any regulations thereunder, generally is extended to December 31, 2026. Further extensions apply in the case of: (1) a qualified plan that is an applicable collectively bargained plan or a governmental plan within the meaning of section 414(d); (2) a section 403(b) plan that is an applicable collectively bargained plan of a tax-exempt organization described in section 501(c)(3) of the Code or maintained by a public school; or (3) an eligible governmental 457(b) plan.

While proposed § 1.401(k)-1(f)(5)(iii) would permit a deemed Roth election with respect to a participant who is subject to the Roth catch-up requirement, the proposed regulations did not include a rule permitting a plan to require that all participants' catch-up contributions be designated Roth contributions. Footnote 16 of the preamble to the proposed regulations explained that, for a participant who is not subject to the Roth catch-up requirement, allowing a plan design that requires all participants' catch-up contributions to be designated Roth contributions would be inconsistent with the language of section 402A(b)(1), which provides that a designated Roth contribution must be elected by an employee “in lieu of all or a portion of elective deferrals the employee is otherwise eligible to make.”  8

Notwithstanding the explanation in footnote 16 of the preamble to the proposed regulations, commenters requested that the final regulations permit a plan to require that all participants' catch-up contributions be made as designated Roth contributions, regardless of a participant's FICA wages for the preceding calendar year. Commenters argued that permitting this plan design would simplify implementation of the Roth catch-up requirement, would reduce section 414(v)(7) failures, and, in some cases, could avoid a perception of unfairness (for example, in the case of a participant who is not subject to the Roth catch-up requirement under section 414(v)(7)(A) because the participant did not have FICA wages in the prior year, but had wages from self-employment for the preceding calendar year that exceeded the Roth catch-up wage threshold). With respect to section 402A(b)(1), commenters argued that provision merely defines the term “qualified Roth contribution program,” does not explicitly prohibit a plan from requiring that all catch-up contributions be made as designated Roth contributions, and permits an employee to have designated Roth contributions “made on the employee's behalf” under the plan.

The Treasury Department and the IRS do not agree with the commenters' characterization of the language in section 402A(b)(1) as merely a definition. In addition, the language of section 402A(b)(1) permitting an employee to have designated Roth contributions “made on the employee's behalf” under a plan was added to section 402A(b)(1) by section 604(b) of the SECURE 2.0 Act. Section 604 of the SECURE 2.0 Act permits certain nonelective contributions and matching contributions that are made after December 29, 2022, to be designated Roth contributions. Thus, this language reflects the distinction between designated Roth contributions that are made in lieu of pre-tax elective deferrals and those that are made in lieu of nonelective or matching contributions.

Further, section 414(v)(7)(A) refers to designated Roth contributions as defined under section 402A(c)(1), and, under section 402A(c)(1), the term “designated Roth contribution” includes “any elective deferral . . . which is excludable from gross income of an employee without regard to [section 402A], and the employee designates (at such time and in such manner as the Secretary may prescribe) as not being so excludable.” Thus, under section 402A(c)(1), an employee must be permitted to make a pre-tax elective deferral in order for the employee to designate such a pre-tax elective deferral as a designated Roth contribution.

Although the requirement under section 402A(b)(1) and (c)(1) that an employee be eligible to make pre-tax elective deferrals in order to elect to make designated Roth contributions in lieu of all or a portion of those pre-tax elective deferrals is not consistent with the Roth catch-up requirement under section 414(v)(7)(A) in the case of a participant who is subject to the Roth catch-up requirement, final regulation § 1.414(v)-2(b)(6) resolves this inconsistency by providing that the Roth catch-up requirement applies notwithstanding section 402A(b)(1) and (c)(1). However, there is no inconsistency in the case of a participant who is not subject to the Roth catch-up requirement. Accordingly, the final regulations do not include a rule permitting a plan to require that all participants' catch-up contributions be designated Roth contributions.

The proposed regulations generally would retain the existing rules in § 1.414(v)-1(c)(2)(i) and (ii) setting forth the applicable dollar catch-up limit that applies to a catch-up eligible participant in an applicable employer plan that is not a SIMPLE plan and a catch-up eligible participant in a SIMPLE plan, respectively (to be adjusted annually under § 1.414(v)-1(c)(2)(iii) for changes in the cost of living). In accordance with section 109 of the SECURE 2.0 Act, for a taxable year beginning after 2024, the proposed regulations also noted the existence of a higher applicable dollar catch-up limit for an individual attaining age 60, 61, 62, or 63 that is 150 percent of the applicable dollar catch-up limit that applies to the individual under § 1.414(v)-1(c)(2)(i) or (ii) (as applicable) during a taxable year beginning in 2024, adjusted for changes in the cost of living for years after 2025.

Some commenters asked that the Treasury Department and the IRS clarify whether a plan term that incorporates the catch-up contribution limit under section 414(v) of the Code by reference also incorporates the optional higher catch-up contribution limit for participants attaining age 60, 61, 62, or 63 permitted under section 414(v)(2)(B)(i) and (ii) in accordance with section 109 of the SECURE 2.0 Act. The Treasury Department and the IRS expect that a plan's terms will be made clear as to whether or not a reference to the catch-up contribution limit under section 414(v) in the plan document includes the optional higher limit for participants attaining age 60, 61, 62, or 63. This ensures that a plan is operated in accordance with its terms. See Q&A J-1 of Notice 2024-2 for a discussion of the deadline under section 501 of the SECURE 2.0 Act to adopt a plan amendment with respect to a provision of the SECURE 2.0 Act.

One commenter requested that the final regulations permit the increased catch-up contribution limit to continue until at least the taxable year in which a catch-up eligible participant attains age 65. The final regulations do not incorporate this comment because, pursuant to section 414(v)(2)(B)(i) and (ii), the higher catch-up contribution limits under section 414(v)(2)(E) apply only to a catch-up eligible participant “who would attain age 60 but would not attain age 64 before the close of the taxable year.”

Another commenter requested confirmation that catch-up eligible participants attaining age 60, 61, 62, or 63 who are eligible to make special section 403(b) catch-up contributions are permitted to make those contributions in addition to catch-up contributions under section 414(v), as increased under section 414(v)(2)(E). As explained in section III.B.3 of this Summary of Comments and Explanation of Revisions (“Coordination with other catch-up contributions”), the catch-up contributions described in section 414(v) may apply in a year in which a participant also qualifies for the special section 403(b) catch-up contributions. Thus, the Treasury Department and the IRS agree that catch-up eligible participants attaining age 60, 61, 62, or 63 who are eligible to make the special section 403(b) catch-up contributions are permitted to make those contributions in addition to catch-up contributions under section 414(v), as increased under section 414(v)(2)(E).

In accordance with section 117 of the SECURE 2.0 Act, for a taxable year beginning in 2024, proposed § 1.414(v)-1(c)(2)(ii)(C) would set forth a higher applicable dollar catch-up limit for a participant in a SIMPLE plan that is sponsored by an eligible employer described in section 408(p)(2)(E)(iv) of the Code and for which the higher applicable dollar catch-up limit under section 414(v)(2)(B)(iii) applies automatically or by election. The higher applicable dollar catch-up limit under proposed § 1.414(v)-1(c)(2)(ii)(C) would be 110 percent of the applicable dollar catch-up limit that applied to the individual under proposed § 1.414(v)-1(c)(2)(ii)(A) during a taxable year beginning in 2024. For taxable years after 2024, proposed § 1.414(v)-1(c)(2)(iii)(C) would provide that this higher applicable dollar catch-up limit is to be adjusted for changes in the cost of living.

With respect to an individual who attains age 60 through 63 in a year in which the individual participates in a SIMPLE plan to which the higher applicable dollar catch-up limit under section 117 of the SECURE 2.0 Act applies, commenters requested that the final regulations clarify whether the SIMPLE plan may provide that the applicable dollar catch-up limit that applies to the individual is an amount equal to the general applicable dollar catch-up limit for SIMPLE plans under section 414(v)(2)(B) of the Code, increased pursuant to section 109 of the SECURE 2.0 Act to an amount equal to 150% of the applicable dollar catch-up limit that would otherwise be in effect and increased further pursuant to section 117 of the SECURE 2.0 Act to an amount equal to 110% of the applicable dollar catch-up limit that would otherwise be in effect. As in the proposed regulations, § 1.414(v)-1(c)(2)(ii)(C) in the final regulations provides that the 10% increase under section 117 of the SECURE 2.0 Act applies to the applicable dollar catch-up limit in effect under § 1.414(v)-1(c)(2)(ii)(A). Section 1.414(v)- 1(c)(2)(ii)(A) sets forth the otherwise applicable dollar catch-up limit for SIMPLE plans, without regard to the higher limit under section 109 of the SECURE 2.0 Act (which is set forth in § 1.414(v)-1(c)(2)(ii)(B)). Thus, under the final regulations, the 10% increase under section 117 of the SECURE 2.0 Act applies only to participants in affected SIMPLE plans who are not permitted to make the increased catch-up contributions under section 109 of the SECURE 2.0 Act.

Section 414(v)(2)(B)(iii) of the Code provides that the higher limit pursuant to section 117 of the SECURE 2.0 Act is “an amount equal to 110 percent of the dollar amount in effect under [section 414(v)(2)(B)(ii) of the Code] for calendar year 2024.” Since section 109 of the SECURE 2.0 Act is effective for taxable years beginning after December 31, 2024, the 50% increase for individuals attaining age 60 through 63 did not apply for calendar year 2024, and the dollar amount in effect under section 414(v)(2)(B)(ii) of the Code for calendar year 2024 was the same for all catch-up eligible individuals. Thus, the applicable dollar amount under section 414(v)(2)(B)(iii) for calendar year 2024 did not take into account the 50% increase under section 109 of the SECURE 2.0 Act. Similarly, the applicable dollar amount that applies under section 414(v)(2)(B)(iii) of the Code for any calendar year after 2024 does not reflect the 50% increase under section 109 of the SECURE 2.0 Act.

Although a SIMPLE plan cannot provide for an applicable dollar catch-up limit that reflects increases under both sections 109 and 117 of the SECURE 2.0 Act, a SIMPLE plan that generally provides for the 10% increase under section 117 of the SECURE 2.0 Act may provide that the 50% increase under section 109 of the SECURE 2.0 Act applies instead to a participant in a year in which the participant attains age 60 through 63. This is because section 414(v)(2)(B)(ii) of the Code provides that the applicable dollar catch-up limit that applies to a SIMPLE plan participant for a year is the general applicable dollar catch-up limit or, where applicable, the adjusted applicable dollar catch-up limit for individuals attaining age 60 through 63, “except as provided in section 414(v)(2)(B)(iii).” The Treasury Department and the IRS interpret that exception to apply only if applying section 414(v)(2)(B)(iii) would increase the applicable dollar catch-up limit for a participant. Thus, beginning with the 2025 calendar year, a SIMPLE plan that is generally subject to the 10% increase under section 117 of the SECURE 2.0 Act may instead permit participants attaining age 60 through 63 to contribute catch-up contributions up to an amount equal to 150% of the applicable dollar catch-up limit that would otherwise be in effect (pursuant to section 109).

In accordance with the universal availability requirement in section 414(v)(4) of the Code, existing § 1.414(v)-1(e)(1)(i) sets forth a general rule that an applicable employer plan that offers catch-up contributions and that is otherwise subject to section 401(a)(4) (including a plan that is subject to section 401(a)(4) pursuant to section 403(b)(12)) will not satisfy the requirements of section 401(a)(4) unless all catch-up eligible participants who participate under any applicable employer plan maintained by the employer are provided with an effective opportunity to make the same dollar amount of catch-up contributions.

The proposed regulations did not propose to amend the general rule set forth in § 1.414(v)-1(e)(1)(i) of the existing regulations. However, the preamble to the proposed regulations explained that the Treasury Department and the IRS do not believe that a plan should fail to satisfy the universal availability requirement merely because the plan utilizes the increased limit for catch-up eligible participants attaining age 60 through 63 that is permitted under section 414(v)(2)(E). Thus, proposed § 1.414(v)-1(e)(1)(iii) would provide an exception to the general rule in § 1.414(v)-1(e)(1)(i) if each catch-up eligible participant who participates under any applicable employer plan maintained by an employer is permitted to make elective deferrals up to the statutory maximum dollar amount of catch-up contributions permitted with respect to the participant under section 414(v). Under this new exception, an applicable employer plan would not fail to satisfy the requirements of section 401(a)(4) merely because the plan allows catch-up eligible participants who are subject to the increased applicable dollar catch-up limit for participants attaining age 60 through 63 under section 414(v)(2)(E) to make catch-up contributions up to that increased limit, while permitting other catch-up eligible participants to make catch-up contributions only up to the applicable dollar catch-up limit that applies generally under section 414(v)(2)(B)(i) or (ii), as applicable. 9

One commenter requested that the final regulations clarify that an applicable employer plan does not fail to satisfy the universal availability requirement merely because it permits non-collectively bargained employees who are subject to the increased applicable dollar catch-up limit for participants attaining age 60 through 63 under section 414(v)(2)(E) to make catch-up contributions up to that increased limit, while retaining the regular applicable dollar catch-up limit under section 414(v)(2)(B)(i) or (ii), as applicable, for its collectively bargained employees. Another commenter requested that the final regulations clarify whether flexibility is available in relation to the increased applicable dollar catch-up limit for participants attaining age 60 through 63 under section 414(v)(2)(E) that would enable a plan to permit fewer catch-up eligible participants to make catch-up contributions up to that increased limit or to limit the increase so that it is below the statutory maximum dollar amount.

The final regulations retain the exception in proposed § 1.414(v)-1(e)(1)(iii) with only minor modification. Thus, under the final regulations, an applicable employer plan generally must satisfy the rule in existing § 1.414(v)-1(e)(1)(i) or permit each participant to make catch-up contributions equal to the statutory maximum that applies to the participant. However, with respect to employees described in section 410(b)(3), the final regulations amend § 1.414(v)-1(e)(2) to provide that an applicable employer plan also does not fail to satisfy the universal availability requirement of § 1.414(v)-1(e) merely because employees described in section 410(b)(3) are provided the opportunity to make catch-up contributions to a lesser extent than other employees. 10 Thus, for example, an applicable employer plan does not fail to satisfy the universal availability requirement merely because it permits non-collectively bargained employees who are subject to the increased applicable dollar catch-up limit for participants attaining age 60 through 63 under section 414(v)(2)(E) to make catch-up contributions up to that increased limit, while permitting collectively bargained employees to make catch-up contributions only up to the applicable dollar catch-up limit that applies generally under section 414(v)(2)(B)(i) or (ii), as applicable.

One commenter requested clarification that the phrase “make the maximum amount of catch-up contributions permitted” in proposed § 1.414(v)-1(e)(1)(iii) would not preclude an employer from utilizing the permitted practices described in § 1.414(v)-1(e)(1)(ii) of the existing regulations, including the cash availability rule in § 1.414(v)-1(e)(1)(ii)(B). 11 Under § 1.414(v)-1(e)(1)(ii), an applicable employer plan does not fail to satisfy the universal availability requirement of § 1.414(v)-1(e) merely because of the practices described in § 1.414(v)-1(e)(1)(ii). Accordingly, the Treasury Department and the IRS agree that the phrase “make the maximum amount of catch-up contributions permitted” in § 1.414(v)-1(e)(1)(iii) of the final regulations does not preclude an employer from utilizing the permitted practices described in § 1.414(v)-1(e)(1)(ii).

One commenter requested relief from the universal availability requirement in the case of a plan that permits catch-up eligible participants attaining age 60 through 63 under section 414(v)(2)(E) to make catch-up contributions up to that increased limit but another plan maintained by a related employer does not, provided that all plans maintained under the same controlled group of employers are amended before the applicability date of the final regulations to permit catch-up eligible participants attaining age 60 through 63 under section 414(v)(2)(E) to make catch-up contributions up to that increased limit. As explained in footnote 6 of the preamble to the proposed regulations, the higher applicable dollar catch-up limit for participants attaining age 60 through 63 may, but is not required to be, included in an applicable employer plan. However, if an applicable employer plan provides for this higher applicable dollar catch-up limit, then any applicable employer plan maintained by an employer within the same controlled group must also provide for this higher applicable dollar catch-up limit, except to the extent that the exception for employees described in section 410(b)(3) applies under § 1.414(v)-1(e)(2) of these regulations. The final regulations do not address the application of the universal availability requirement before the applicability date of the final regulations.

Proposed § 1.414(v)-2(a) would set forth general rules relating to the Roth catch-up requirement under section 414(v)(7)(A). Under proposed § 1.414(v)-2(a)(2), if a catch-up eligible participant in an applicable employer plan had FICA wages for the preceding calendar year from the employer sponsoring the plan (as defined in proposed § 1.414(v)-2(b)(3)) that exceeded the Roth catch-up wage threshold, then section 414(v)(1) would apply with respect to the participant's elective deferrals that are catch-up contributions only if they are designated Roth contributions (as defined in section 402A(c)(1)). Under proposed § 1.414(v)-2(a)(3), the initial $145,000 Roth catch-up wage threshold would be subject to cost-of-living adjustments, in accordance with section 414(v)(7)(E). 12 Under proposed § 1.414(v)-2(a)(4), the Roth catch-up requirement would not apply to a participant in a SEP arrangement or a SIMPLE IRA plan, in accordance with section 414(v)(7)(C). As further discussed in this Section III.A.1, there are no substantive changes to these provisions in the final regulations.

Consistent with section 414(v)(7)(A) and the description of anticipated guidance in Notice 2023-62, proposed § 1.414(v)-2(a)(2) would provide that a participant who did not have FICA wages exceeding $145,000 (as adjusted) from the employer sponsoring the plan for the preceding calendar year would not be subject to the Roth catch-up requirement under the plan for the current year. Proposed § 1.414(v)-2(a)(2) would define FICA wages by reference to the FICA taxes imposed by sections 3101(a) and 3111(a), not sections 3101(b) and 3111(b), and would provide that the wages are taken into account for this purpose in the same year that they are taken into account for FICA tax purposes. Accordingly, an individual who did not have any FICA wages from the employer sponsoring the plan for the preceding calendar year (for example, a partner who had only self-employment income; an individual who had wages under section 3231(e) that are subject to taxation under the Railroad Retirement Tax Act, codified at title 45, chapter 9 of the United States Code, rather than FICA; or a State or local government employee whose services were excluded from the definition of employment under section 3121(b)(7) without regard to section 3121(u)) would not be subject to the Roth catch-up requirement under the plan in the current year. Similarly, an individual who received cash compensation from the employer sponsoring the plan in the preceding calendar year but nevertheless did not have any FICA wages from the employer for that year (for example, because the compensation was taxed in an earlier year pursuant to section 3121(v)(2)) would not be subject to the Roth catch-up requirement under the plan in the current year.

One commenter requested clarification as to why applicability of the Roth catch-up requirement would be determined under the proposed regulations on the basis of prior year FICA wages for purposes of sections 3101(a) and 3111(a) (that is, FICA wages that are Social Security wages reported in Box 3 of Form W-2), as opposed to sections 3101(b) and 3111(b) (that is, FICA wages that are Medicare wages reported in Box 5 of Form W-2). Section 1.414(v)-2(a)(2) retains the rule defining FICA wages by reference to the FICA taxes imposed by sections 3101(a) and 3111(a) due to the impact that referencing the FICA taxes imposed by sections 3101(b) and 3111(b) might have on employees of State and local governments. Section 3121(a) defines “wages” for FICA purposes as all remuneration for employment (subject to certain exceptions). Under section 3121(b), which defines “employment” for FICA purposes, the services of certain employees are excluded from the definition of employment (including, under section 3121(b)(7), the services of employees of State and local governments unless an exception applies) and, therefore, these employees generally do not have wages under section 3121(a) and consequently are not subject to section 414(v)(7) of the Code. 13 However, as a result of section 3121(u)(2), wages subject to the taxes imposed by sections 3101(b) and 3111(b) are reported in Box 5 for State and local government employees who are covered by Medicare even if no wages are reported in Box 3. The Treasury Department and the IRS do not interpret the Box 5 wages reported in accordance with the exception in section 3121(u)(2) to be section 3121(a) FICA wages for purposes of section 414(v)(7) because Box 5 wages do not relate to Social Security coverage. Therefore, the final regulations retain the rule that applicability of the Roth catch-up requirement to a participant is based on the prior year FICA wages reported in Box 3 of Form W-2 for the participant. The use of this rule achieves the intended result of excepting those State and local government employees who do not have wages subject to the taxes imposed by sections 3101(a) and 3111(a) relating to Social Security coverage from the application of section 414(v)(7).

The commenter also asked whether a plan could rely on the Social Security wages reported in Box 3 of a catch-up eligible participant's Form W-2 for the preceding calendar year for purposes of determining whether the participant is subject to the Roth catch-up requirement, and whether the Social Security wage base could have any impact on the Roth catch-up wage threshold. The Treasury Department and the IRS do not expect that the limitation of an employee's wages under sections 3101(a) and 3111(a) to the maximum Social Security wage base would affect the ability to determine applicability of the Roth catch-up wage threshold on the basis of those wages. For 2024, the Social Security wage base limit was $168,600, which is significantly higher than the $145,000 threshold for 2024 wages on which applicability of the Roth catch-up requirement in 2025 was based. As both dollar amounts are adjusted annually for cost-of-living increases under current law, the Treasury Department and the IRS do not expect that applying the Social Security wage base limit will ever affect the determination of whether a participant is subject to the Roth catch-up wage threshold.

Commenters also requested that, until the applicability date of the final regulations, a plan be permitted to rely on Medicare wages reported in Box 5 of a catch-up eligible participant's Form W-2 for the preceding calendar year for purposes of determining whether the participant is subject to the Roth catch-up requirement. In response to these comments, § 1.414(v)-2(e)(2)(i) clarifies that, for contributions in taxable years prior to the applicability date of the final regulations, a reasonable, good faith interpretation standard applies with respect to section 414(v)(7). For a discussion of the application of this standard, see the Applicability Dates section later in this preamble.

Section 414(v)(7)(B) provides that, in the case of an applicable employer plan with respect to which section 414(v)(7)(A) applies to any participant for a plan year, section 414(v)(1) shall not apply to the plan unless the plan provides that any catch-up eligible participant may make catch-up contributions as designated Roth contributions.

Proposed § 1.414(v)-2(a)(5)(ii) would set forth a rule to address the application of section 414(v)(7)(B) to a plan that is subject to the qualification requirements of both section 401(a) and section 1081.01 of the Puerto Rico Code (dual-qualified plan). 14 As explained in the preamble to the proposed regulations, if a dual-qualified plan that covers both employees in the United States and employees in Puerto Rico permits any catch-up eligible participant who is subject to the Roth catch-up requirement to make catch-up contributions as designated Roth contributions for a plan year, then, in accordance with section 414(v)(7)(B), the plan generally would be required to permit all catch-up eligible participants to make catch-up contributions as designated Roth contributions for the plan year. However, the Puerto Rico Code currently does not provide for designated Roth contributions. In order to address this issue, the proposed regulations would provide that, in the case of a catch-up eligible participant who is subject to the Roth catch-up requirement of section 414(v)(7)(A) of the Code and is subject to section 1081.01 of the Puerto Rico Code, the requirements of section 414(v)(7)(B) of the Code would be treated as satisfied if, under the applicable employer plan, that participant is permitted to make catch-up contributions as after-tax contributions within the meaning of section 1081.01(a)(15) of the Puerto Rico Code.

Commenters requested that the final regulations permit a dual-qualified plan to offer a participant who is subject to both section 414(v)(7)(A) of the Code and section 1081.01 of the Puerto Rico Code the opportunity to make catch-up contributions as pre-tax contributions (rather than after-tax catch-up contributions), and that the plan need not offer after-tax catch-up contributions in order to satisfy section 414(v)(7)(B) of the Code. These commenters argued that the Roth catch-up requirement of section 414(v)(7)(A), and the related Roth catch-up availability requirement of section 414(v)(7)(B), should not apply in the case of a participant who, under the Puerto Rico Code, is not permitted to make designated Roth contributions.

The Treasury Department and the IRS have determined that providing transition relief for dual-qualified plans is consistent with the historical approach taken with respect to plans qualified under the Puerto Rico Code if there is a difference in the United States and Puerto Rico Codes that does not allow for the same treatment of contributions made by participants in the United States and Puerto Rico. 15 Therefore, in response to these comments, the final regulations do not include the rule set forth in proposed § 1.414(v)-2(a)(5)(ii). Instead, § 1.414(v)-2(a)(6) provides that the Roth catch-up requirement of section 414(v)(7)(A) and the Roth catch-up availability requirement of section 414(v)(7)(B) are treated as satisfied for a taxable year with respect to a catch-up eligible participant who is subject to section 1081.01 of the Puerto Rico Code, if that taxable year begins before the effective date of any future amendment to the Puerto Rico Code to provide for designated Roth contributions.

Another commenter requested that the final regulations clarify how the catch-up contribution rules apply to employees who move between the mainland and Puerto Rico during the year. The final regulations do not address this comment as it involves an interpretation of the Puerto Rico Code and, therefore, is outside the scope of the final regulations.

Under proposed § 1.414(v)-2(b)(1), an elective deferral that is determined to be a catch-up contribution at the time of contribution under the timing rules in § 1.414(v)-1(c)(3) of the existing regulations (for example, an elective deferral that is a catch-up contribution because it exceeds the section 401(a)(30) limit on elective deferrals) would be required to be made as a designated Roth contribution by a participant who is subject to the Roth catch-up requirement only to the extent the participant has not previously made elective deferrals as designated Roth contributions during the calendar year or taxable year equal to the applicable dollar catch-up limit. Thus, if a catch-up eligible participant's total elective deferrals that are designated Roth contributions over the course of a calendar year or taxable year (including, if applicable, contributions to a pension-linked emergency savings account described in section 402A(e) of the Code) equal or exceed the total elective deferrals that are determined to be catch-up contributions, then the participant would satisfy the Roth catch-up requirement. 16

One commenter requested that the final regulations provide that designated Roth contributions that are made prior to a participant's elective deferrals for the calendar year reaching the section 401(a)(30) limit may, but are not required to, be taken into account for purposes of determining whether the participant has satisfied the Roth catch-up requirement. The commenter explained that some employers have indicated that taking into account designated Roth contributions that are made earlier in a calendar year would create administrative burden and complexity.

In order to maintain flexibility for participants, § 1.414(v)-2(b)(1) of the final regulations retains the proposed rule that, for a participant who is subject to the Roth catch-up requirement, an elective deferral that is treated as a catch-up contribution at the time of deferral is required to be a designated Roth contribution only to the extent the participant has not previously made elective deferrals that are designated Roth contributions during the taxable year equal to the applicable dollar catch-up limit. However, as explained in sections I and III.C.3.a of this Summary of Comments and Explanation of Revisions (“Amendments to Regulations Under Sections 401(k) and 403(b)—Deemed Roth Catch-up Election” and “Prerequisite to correct certain section 414(v)(7) failures under the new correction methods”), in order to ease administrative burden for plans, in determining when during the year to implement a deemed Roth election under final regulation § 1.401(k)-1(f)(5)(iii), a plan is not required to take into account elective deferrals made by a participant earlier in the year as designated Roth contributions. Thus, a plan may provide that a deemed Roth election will be implemented with respect to a participant once a participant's total elective deferrals for the year (including any designated Roth contributions) equal the section 401(a)(30), 402(g)(7), or 457(b) limit, as applicable. Further, after implementing the deemed Roth election, the plan would not be required to recharacterize any designated Roth catch-up contributions made pursuant to the deemed election as pre-tax for the purpose of counting any designated Roth contributions made earlier in the year by the participant toward satisfaction of the Roth catch-up requirement. However, since the plan must also provide such a participant an effective opportunity to make a new election that is different than the deemed election, if a participant who is subject to the Roth catch-up requirement makes an affirmative election to make pre-tax catch-up contributions, the plan would be required to take into account any elective deferrals made by the participant earlier in the year as designated Roth contributions when determining the amount of the pre-tax catch-up contributions to be corrected in order to comply with section 414(v)(7) (such that the pre-tax catch-up contributions must be corrected—that is, either distributed from the plan or corrected in accordance with a correction method set forth in final regulation § 1.414(v)-2(c)(2)—only to the extent that a participant's catch-up contributions for the year exceed the participant's designated Roth contributions made over the course of the year).

Another commenter requested clarification as to whether an in-plan Roth rollover that is elected voluntarily by a participant under section 402A(c)(4)(E) could be used to satisfy the Roth catch-up requirement. The Treasury Department and the IRS have determined that an in-plan Roth rollover that is elected by a participant voluntarily under section 402A(c)(4)(E) may not be used to satisfy the Roth catch-up requirement because the amount of the in-plan Roth rollover could be attributable to contributions other than elective deferrals. However, as described in section III.C.2 of this Summary of Comments and Explanation of Revisions (“Additional permissible correction methods for elective deferrals that exceed an applicable limit”), § 1.414(v)-2(c)(2)(iii) of the final regulations generally retains the provision of the proposed regulations permitting a plan to use the in-plan Roth rollover correction method to correct a pre-tax elective deferral that exceeds an applicable limit but does not satisfy the Roth catch-up requirement.

In accordance with section 402A(a), an applicable employer plan may, but is not required to, include a qualified Roth contribution program within the meaning of section 402A(b). In addition, under the proposed regulations, an applicable employer plan that allows catch-up contributions, but does not have a qualified Roth contribution program, would not be required to adopt such a program. The plan would be allowed to permit catch-up eligible participants who are not subject to the Roth catch-up requirement to make catch-up contributions but not permit catch-up eligible participants who are subject to the Roth catch-up requirement to make catch-up contributions.

With respect to the universal availability requirement of § 1.414(v)-1(e), proposed § 1.414(v)-2(b)(2) would provide that an applicable employer plan that does not include a qualified Roth contribution program would not fail to satisfy the universal availability requirement merely because the plan (or another applicable employer plan maintained by the employer that does not include a qualified Roth contribution program) does not permit catch-up eligible participants who are subject to the Roth catch-up requirement to make catch-up contributions. However, proposed § 1.414(v)-2(b)(2)(ii) also would provide that existing § 1.414(v)-1(d)(4)  17 would not apply to an applicable employer plan that does not include a qualified Roth contribution program and permits only catch-up eligible participants who are not subject to the Roth catch-up requirement to make catch-up contributions. As explained in the preamble to the proposed regulations, § 1.414(v)-1(d)(4) would not apply to such a plan because not all catch-up eligible employees under the plan would be able to make catch-up contributions.

Because the Roth catch-up wage threshold is slightly lower than the wage threshold used in the definition of highly compensated employee (HCE) under section 414(q)(1)(B), some non-HCEs may be subject to the Roth catch-up requirement, 18 and some HCEs may not be subject to the Roth catch-up requirement (for example, because they did not receive FICA wages for the preceding year). Thus, if a plan that does not include a qualified Roth contribution program prohibits catch-up eligible participants who are subject to the Roth catch-up requirement from making catch-up contributions, while permitting other catch-up eligible participants to make catch-up contributions, then the plan might fail to satisfy the nondiscrimination test with respect to the availability of catch-up contributions performed under § 1.401(a)(4)-4. Accordingly, proposed § 1.414(v)-2(b)(2)(ii) would provide that such a plan would be permitted to also preclude one or more catch-up eligible participants who are HCEs and who are not subject to the Roth catch-up requirement (for example, because they did not receive FICA wages from the employer sponsoring the plan for the preceding year) from making catch-up contributions if doing so facilitates satisfaction of § 1.401(a)(4)-4 with respect to the availability of catch-up contributions.

Commenters generally requested that the final regulations provide that a plan will not be treated as failing to satisfy benefits, rights, and features testing under section 401(a)(4) with respect to catch-up contributions merely because the plan does not include a qualified Roth contribution program. These commenters argued that, although some non-HCEs (those who are subject to the Roth catch-up requirement) would not be permitted to make catch-up contributions under such a plan design, HCEs also generally would be excluded from making catch-up contributions, and that it would be impractical to satisfy § 1.401(a)(4)-4 by precluding one or more catch-up eligible participants who are HCEs and who are not subject to the Roth catch-up requirement from making catch-up contributions. One of these commenters requested that, if the final regulations retain the approach in the proposed regulations, the final regulations clarify how a plan that fails to satisfy benefits, rights, and features testing with respect to catch-up contributions could preclude one or more HCEs who are not subject to the Roth catch-up requirement from making catch-up contributions in a timely manner. Another commenter requested that, if the final regulations do not treat § 1.414(v)-1(d)(4) as applying, then nondiscrimination testing for a plan that does not include a qualified Roth contribution program should be based only on participants who are age 50 and above, and not on the entire employee population.

The final regulations generally retain the rules of proposed § 1.414(v)-2(b)(2) (although § 1.414(v)-2(b)(2)(ii) is renumbered as § 1.414(v)-2(b)(3) in the final regulations). However, in response to these comments, the final regulations clarify that, in the case of a plan that does not include a qualified Roth contribution program (and, therefore, may need to preclude one or more catch-up eligible participants who are HCEs and who are not subject to the Roth catch-up requirement from making catch-up contributions to facilitate satisfaction of § 1.401(a)(4)-4 with respect to the availability of catch-up contributions), the plan will be deemed to satisfy § 1.401(a)(4)-4 with respect to the availability of catch-up contributions if the plan provides that all catch-up eligible participants who are HCEs with net earnings from self-employment for the preceding calendar year from the employer sponsoring the plan above the Roth catch-up wage threshold are not permitted to make catch-up contributions. This safe harbor provision may be used even if a plan does not have any participants with net earnings from self-employment for the preceding calendar year. In addition, § 1.414(v)-2(b)(3) of the final regulations provides that this safe harbor provision may be used by a plan that includes a qualified Roth contribution program and, in accordance with § 1.414(v)-2(b)(4)(ii), (b)(4)(iii), or (b)(4)(iv)(A), does not permit pre-tax catch-up contributions for one or more employees who are not subject to section 414(v)(7) (that is, one or more non-HCEs who are determined to be subject to the Roth catch-up requirement solely due to an optional plan term providing for aggregation of wages in accordance with § 1.414(v)-2(b)(4)(ii), (b)(4)(iii), or (b)(4)(iv)(A) of these regulations).

One commenter requested examples to illustrate the interaction between the requirement that certain catch-up contributions be designated Roth contributions and the rule permitting special catch-up contributions for section 403(b) plans under section 402(g)(7) for employees with at least 15 years of service. Two other commenters requested clarification that the requirement that certain catch-up contributions be designated Roth contributions does not apply to the special section 403(b) catch-up contributions.

As described in § 1.403(b)-4(c)(2) of the existing regulations, the catch-up contributions described in section 414(v) may apply in a year in which a participant also qualifies for the special section 403(b) catch-up contributions. In addition, § 1.403(b)-4(c)(3)(iv) provides that any catch-up amount contributed by an employee who is eligible for both types of catch-up contributions is treated first as a special section 403(b) catch-up contribution and then as a catch-up contribution under section 414(v). Accordingly, the special section 403(b) catch-up contributions are not subject to section 414(v), including the requirement under section 414(v)(7) that certain catch-up contributions be designated Roth contributions.

One commenter requested examples to illustrate the application of section 457(e)(18)(A)(ii), and another commenter requested clarification that the requirement that certain catch-up contributions be designated Roth contributions does not apply to the special section 457(b)(3) catch-up contributions permitted for the last three taxable years ending before an individual attains normal retirement age. As described in the Background section of this Treasury decision, if a catch-up eligible participant's limit under section 457(e)(18) is greater than the limit under section 457(b)(3) (determined without regard to section 457(e)(18)), then a portion of the catch-up contributions made to the eligible governmental 457(b) plan by the participant is required to be designated Roth contributions. As noted in footnote 5 of the preamble to the proposed regulations, proposed regulations relating to the inclusion of a qualified Roth contribution program in an eligible governmental 457(b) plan were published in the Federal Register (81 FR 40548) and those proposed regulations have not been finalized.

The determination as to whether the Roth catch-up requirement applies to a catch-up eligible participant is based on the amount of the participant's FICA wages for the preceding year “from the employer sponsoring the plan,” but that phrase is not defined in section 414(v)(7). For purposes of determining an individual's FICA wages, the term “employer” generally means the person for whom the individual performs service as an “employee” (determined under the common law standards for employee status set forth in § 31.3121(d)-1(c)). Thus, for purposes of determining the individual's FICA wages, the term “employer” generally refers solely to an individual's common law employer. 19 Because the phrase “from the employer sponsoring the plan” modifies the reference to FICA wages in section 414(v)(7)(A), the determination of whether the Roth catch-up requirement applies to a participant would generally follow the FICA rules and be based on the FICA wages from the participant's common law employer.

Proposed § 1.414(v)-2(b)(3) would provide that, with respect to each catch-up eligible participant who is subject to the Roth catch-up requirement, the term “employer sponsoring the plan” refers only to the participant's common law employer contributing to the plan. Under the proposed regulation, the employer sponsoring the plan would not include other entities that are treated as a single employer with a catch-up eligible participant's common law employer under section 414(b), (c), (m), or (o). Some commenters agreed with the approach in the proposed regulation. Other commenters requested that the final regulation provide an option to aggregate FICA wages from different employers in certain situations, in order to ease plan administration by aligning determination of applicability of the Roth catch-up requirement with the employers' general payroll practices. These commenters argued that this aggregation option would be particularly helpful in situations involving entities that are aggregated with the participant's common law employer under section 414(b), (c), (m), or (o) and situations involving a common paymaster in accordance with section 3121(s).

Section 1.414(v)-2(b)(4)(i) of the final regulations, which is renumbered from proposed § 1.414(v)-2(b)(3), provides that, with respect to each catch-up eligible participant who is subject to the Roth catch-up requirement, the term “employer sponsoring the plan” refers to the participant's common law employer contributing to the plan. However, in response to comments, § 1.414(v)-2(b)(4)(ii) provides that if the common law employer uses a common paymaster in accordance with section 3121(s), the plan may provide that the employee's common law employer is aggregated with one or more other employers using that common paymaster and treat the aggregated employers as a single employer sponsoring the plan for purposes of section 414(v)(7) and § 1.414(v)-2. Section 1.414(v)-2(b)(4)(iii) also provides that if the common law employer is a member of a group of employers that are treated as a single employer under the rules of section 414(b), (c), (m), or (o), the plan may provide that the employee's common law employer is aggregated with one or more other employers in that group of employers and treat the aggregated employers as a single employer sponsoring the plan for purposes of section 414(v)(7) and § 1.414(v)-2. For example, a plan could provide for aggregation of selected related employers for purposes of section 414(v)(7) by listing the employers being aggregated in the plan document. In cases of aggregation in accordance with § 1.414(v)-2(b)(4)(ii) or (iii), the employee's wages from the common law employer and from the one or more other employers that are aggregated with the common law employer are treated as wages from the employer sponsoring the plan.

One commenter requested that the final regulations address how applicability of the Roth catch-up requirement is determined for a calendar year for which wages paid to an employee by a predecessor employer are attributed to the employee's common law employer who is a successor employer on account of an asset purchase in accordance with § 31.3121(a)(1)-1(b). Specifically, the commenter requested that the final regulations provide a safe harbor permitting plan administrators to rely on wage information as reported on a Form W-2 issued by the successor employer for the calendar year of the asset purchase in accordance with the standard or alternate procedure for Form W-2 reporting set forth in Rev. Proc. 2004-53, 2004-34 IRB 320. 20

Section 1.414(v)-2(b)(4)(iv) of the final regulations provides such a safe harbor. Thus, pursuant to § 1.414(v)-2(b)(4)(iv)(A), if a successor employer files a Form W-2 for the calendar year of the asset purchase in accordance with the alternate procedure set forth in Rev. Proc. 2004-53, then a plan that is sponsored by the successor employer (or an entity that is aggregated with the successor employer in accordance with final regulation § 1.414(v)-2(b)(4)(ii) or (iii)) may provide that all of the wages reported in Box 3 of the Form W-2 are treated as wages from the employer sponsoring the plan for purposes of determining applicability of the Roth catch-up requirement. So, too, pursuant to § 1.414(v)-2(b)(4)(iv)(B), if a successor employer files a Form W-2 for the calendar year of the asset purchase in accordance with the standard procedure set forth in Rev. Proc. 2004-53, then a plan that is sponsored by the successor employer (or an entity that is aggregated with the successor employer in accordance with final regulation § 1.414(v)-2(b)(4)(ii) or (iii)) may provide that the wages paid by the successor employer for the year that are treated as wages from the employer sponsoring the plan for purposes of determining applicability of the Roth catch-up requirement are limited to the wages reported in Box 3 of the Form W-2.

One commenter requested that the final regulations address the treatment, for purposes of section 414(v)(7), of an employee who receives wages from an entity that is disregarded as an entity separate from its owner in accordance with § 301.7701-2(c)(2)(i) (that is, the entity has not made an election under § 301.7701-3(b)(1)(ii) to be classified as a corporation). The commenter noted that a disregarded entity is generally disregarded for Federal income tax purposes but is treated as a separate entity for employment tax purposes. Section 1.414(v)-2(b)(4)(v) of the final regulations provides that the owner of the disregarded entity is treated as the employer sponsoring the plan and the employee's wages from the employer sponsoring the plan include the employee's wages from the disregarded entity and from its owner.

One commenter suggested that, for purposes of the Roth catch-up requirement as applied to a multiemployer plan, the employer sponsoring the plan is the joint board of trustees because section 3(16)(B) of ERISA defines the “plan sponsor” of a multiemployer plan as the joint board of trustees (rather than the contributing employers). Under the interpretation of section 414(v)(7)(A) suggested by the commenter, the employees of those other employers would not be subject to section 414(v)(7)(A) (because those other employers are merely signatories of the collective bargaining agreement pursuant to which their employees participate in the multiemployer plan and are contributors to that plan, but would not be employees of the employer sponsoring the plan). 21 As explained in the preamble to the proposed regulations, the Treasury Department and the IRS do not agree that this is a reasonable interpretation of section 414(v)(7)(A) because the rules in title 29 of the United States Code, which includes section 3(16)(B) of ERISA, are separate from the rules of the Internal Revenue Code in title 26 of the United States Code, and title 29 of the United States Code does not include any provisions that directly apply to, or are parallel to, the Code's catch-up contribution rules. Rather, in the context of the Roth catch-up requirement, the employer sponsoring the plan is the common law employer that is the source of the participant's FICA wages and contributions to the multiemployer plan (but the plan may provide for aggregation of FICA wages from certain related employers as described earlier in this preamble section).

For a plan that has more than one employer sponsoring the plan, proposed § 1.414(v)-2(b)(4) would apply the Roth catch-up requirement on the basis of FICA wages (if any) for the preceding calendar year solely from a participant's common law employer without aggregating those wages with the FICA wages from other employers, including employers that participate in the same plan or employers that are treated as a single employer together with the common law employer under section 414(b), (c), (m), or (o). Thus, under the proposed regulations, a catch-up eligible participant who had FICA wages exceeding $145,000 (as adjusted) in the preceding calendar year from any employer other than the employer sponsoring the plan (as defined with respect to the participant in accordance with proposed § 1.414(v)-2(b)(3)) would not be subject to the Roth catch-up requirement under the plan in the current year if the participant did not also have more than $145,000 (as adjusted) of FICA wages for the preceding year from the employer sponsoring the plan. Section 1.414(v)-2(b)(5) of the final regulations, which was renumbered from proposed § 1.414(v)-2(b)(4), includes that same rule related to wages from an employer other than the employer sponsoring the plan, except that the rule takes into account the new optional aggregation rules of § 1.414(v)-2(b)(4) for determining the employer sponsoring the plan (that is, the rules allowing for aggregation of wages in situations involving controlled groups and common paymasters).

As explained in the Background section of the preamble to the proposed regulations, section 414(v)(7)(A) provides that section 414(v)(1) applies to catch-up contributions made by a participant who is subject to the Roth catch-up requirement only if the catch-up contributions are designated Roth contributions. If a participant who is subject to the Roth catch-up requirement makes a pre-tax elective deferral in excess of an applicable limit, then section 414(v)(1) will not apply to that elective deferral and the plan will fail to be qualified unless the plan corrects the failure. A plan is permitted to correct this type of error by distributing the additional elective deferrals that are not catch-up contributions under section 414(v)(1) from the plan in accordance with a permitted correction method specific to the limit on elective deferrals that the additional elective deferrals exceeded (for example, the correction method in § 1.402(g)-1(e) for elective deferrals that exceeded the section 401(a)(30) limit, the correction method in section 6.06(1) and (2) of Revenue Procedure 2021-30, 2021-31 IRB 172, for elective deferrals that resulted in the participant's annual additions exceeding the section 415(c) limit, or the correction method in § 1.401(k)-2(b)(2) or Appendix B, section 2.01, of Revenue Procedure 2021-30 for elective deferrals that exceeded the ADP limit).

One commenter requested clarification regarding the treatment of excess contributions (as defined in Code section 401(k)(8)(B)) as catch-up contributions that are not required to be distributed under § 1.401(k)-2(b)(4)(v) in the case of a plan with a plan year other than the calendar year and an HCE who is not subject to the Roth catch-up requirement for part of the plan year and is subject to the Roth catch-up requirement for the remainder of the plan year. Under § 1.401(k)-2(b)(1)(ii), a plan may permit an HCE with elective contributions for a year that includes both pre-tax elective contributions and designated Roth contributions to elect whether the excess contributions are to be attributed to pre-tax elective contributions or designated Roth contributions. Consistent with that rule, a plan may permit an HCE who was subject to the Roth catch-up requirement for only part of the plan year to elect whether the excess contributions that are treated as catch-up contributions are contributions that were subject to the Roth requirement or were permitted to be pre-tax contributions.

As an alternative to making a corrective distribution, proposed § 1.414(v)-2(c)(2) would permit a plan to use either of two new methods to correct a section 414(v)(7) failure.

Under the correction method set forth in proposed § 1.414(v)-2(c)(2)(ii), a plan would be permitted to correct a participant's pre-tax catch-up contribution that was required to be a designated Roth contribution by transferring the elective deferral (adjusted for allocable gain or loss) from the participant's pre-tax account to the participant's designated Roth account and reporting the contribution (not adjusted for allocable gain or loss) as a designated Roth contribution on the participant's Form W-2 for the year of the deferral (that is, reporting the contribution as if it had been correctly made as a designated Roth contribution). As explained in Section III.C.2.a of the preamble to the proposed regulations (“Form W-2 Correction Method”), the contribution (not adjusted for allocable gain or loss) would be includible in the participant's gross income for the year of the deferral as if the contribution had been correctly made as a designated Roth contribution. However, this method would not be permitted to be used if the participant's Form W-2 for that year has already been filed or furnished to the participant.

One commenter requested that the final regulations permit a correction under the Form W-2 correction method to be reported on a participant's amended Form W-2 for the year of the deferral (in other words, permit the Form W-2 correction method to be used even if the participant's Form W-2 for the year of the deferral has already been filed or furnished to the participant). The final regulations do not reflect this request because the Treasury Department and the IRS have determined that such an approach would be overly burdensome to affected participants, who might be required to file amended income tax returns to reflect the amended Forms W-2, and create additional administrative burden for the IRS, which would be required to process any amended Federal income tax returns.

Another commenter explained that the Form W-2 correction method is unlikely to be effectively implemented by multiemployer plans because those plans do not have access to or control over their contributing employers' payroll systems. However, as described in section III.C.2.b of this Summary of Comments and Explanation of Revisions (“In-plan Roth rollover correction method”), these final regulations also include an in-plan Roth rollover correction method as an alternative to distribution.

Accordingly, the final regulations generally retain the Form W-2 correction method as set forth in proposed § 1.414(v)-2(c)(2)(ii) without modification. However, the final regulations clarify the method for calculating earnings and losses for purposes of determining the amount to be transferred from a participant's pre-tax account to the participant's designated Roth account, as described in section III.C.2.b of this Summary of Comments and Explanation of Revisions (“In-plan Roth rollover correction method”).

Under proposed § 1.414(v)-2(c)(2)(iii), a plan would be permitted to correct a participant's pre-tax catch-up contribution that was required to be a designated Roth contribution through an in-plan Roth rollover in accordance with section 402A(c)(4)(E). As explained in Section III.C.2.b of the preamble to the proposed regulations (“In-Plan Roth Rollover Correction Method”), a plan would directly roll over the elective deferral (adjusted for allocable gain or loss) from the participant's pre-tax account to the participant's designated Roth account and report the amount of the in-plan Roth rollover on Form 1099-R (Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.) for the year of rollover. The provisions of Notice 2010-84, 2010-51 IRB 872, and Notice 2013-74, 2013-52 IRB 819, would generally apply to an in-plan Roth rollover used to correct a section 414(v)(7) failure. Thus, the amount directly rolled over to the participant's designated Roth account would be the same as the amount reported on Form 1099-R, and the contribution (adjusted for allocable gain or loss) would be includible in the participant's gross income for the year of the rollover.

One commenter requested that the final regulations not require that an amount directly rolled over to a participant's designated Roth account be adjusted for allocable gain or loss. The final regulations do not reflect this comment because the amount directly rolled over to the participant's designated Roth account would be includible in the participant's gross income for the year of the rollover, which may be a later year than the year the contribution would have been includible if it had been made correctly as a designated Roth contribution. Thus, the adjustment for any allocable gain would serve to balance any delayed inclusion in gross income.

The commenter also requested that, if the final regulations require that the amount directly rolled over to a participant's designated Roth account be adjusted for allocable gain or loss, the final regulations maintain flexibility as to the method a plan uses to calculate the gain or loss. Another commenter requested that, with respect to both the Form W-2 and in-plan Roth rollover correction methods, the final regulations provide a rule similar to § 1.401(k)-2(b)(2)(iv), under which a plan generally may use any reasonable method for computing the income allocable to excess contributions or use the alternative method under § 1.401(k)-2(b)(2)(iv)(C). In response to these comments, § 1.414(v)-2(c)(2)(ii) and (iii) of the final regulations clarifies that the adjustment for earnings or losses for an in-plan Roth rollover correction must be calculated in accordance with the flexible standard provided under § 1.402(g)-1(e)(5). A similar clarification applies for purposes of determining the amount to be transferred to the participant's designated Roth account if a section 414(v)(7) failure is corrected under the Form W-2 method.

Commenters also requested clarification regarding the extent to which an in-plan Roth rollover that is used to correct a section 414(v)(7) failure is different than an in-plan Roth rollover under section 402A(c)(4)(E). One commenter requested that the final regulations clarify that the participant election provision of section 402A(c)(4)(E)(i) does not apply to an in-plan Roth rollover that is used to correct a section 414(v)(7) failure. The Treasury Department and the IRS agree that an in-plan Roth rollover correction is permitted to be made only by a plan and may not be elected voluntarily by a participant. Therefore, in response to these comments, § 1.414(v)-2(c)(2)(iii) requires that the rules of section 402A(c)(4)(E)(ii) and (iii) (rather than section 402A(c)(4)(E) in its entirety) apply to the correction.

Similarly, some commenters requested clarification that a plan may provide for the use of the in-plan Roth rollover method to correct a section 414(v)(7) failure even if the plan does not permit participants to elect in-plan Roth rollovers under section 402A(c)(4)(E). As explained in Q&A-2 of Notice 2010-84, a participant may elect an in-plan Roth rollover only if the plan provides for such rollovers. However, the Treasury Department and the IRS agree that, because an in-plan Roth rollover correction for a section 414(v)(7) failure is implemented pursuant to plan terms rather than a participant's voluntary election, a plan may provide for the use of the in-plan Roth rollover correction method even if the plan does not permit participants to elect in-plan Roth rollovers under section 402A(c)(4)(E).

One commenter requested clarification that the use of the in-plan Roth rollover correction method is not a benefit, right, or feature that is subject to section 401(a)(4). Under existing § 1.401(a)(4)-4(e)(3)(iii)(I), the right to make rollover contributions and transfers to and from a plan (which would include the right to make an in-plan Roth rollover) is a right or feature. However, a plan's use of the in-plan Roth rollover correction method is an administrative detail not reasonably expected to be of meaningful value to an employee under § 1.401(a)(4)-4(e)(3)(ii)(C) and not a benefit, right, or feature for purposes of section 401(a)(4) and § 1.401(a)(4)-4.

Commenters also requested clarification regarding the taxable year in which the 5-taxable-year period for a qualified distribution under section 402A(d)(2)(B) begins if an amount that is transferred pursuant to the Form W-2 correction method, or directly rolled over pursuant to the in-plan Roth rollover correction method, is the first contribution to a participant's designated Roth account. One commenter requested that the final regulations provide that, under either correction method, the 5-taxable-year period begins in the year in which the pre-tax elective deferral was made, and another commenter requested confirmation that an amount directly rolled over to a participant's designated Roth account pursuant to an in-plan Roth rollover correction is treated in the same manner as a participant-initiated Roth contribution for purposes of determining the 5-taxable-year period.

Under section 402A(d)(2)(B), for purposes of determining whether a payment or distribution from a designated Roth account is treated as a qualified distribution, the 5-taxable-year period generally begins with “the first taxable year for which the individual made a designated Roth contribution to any designated Roth account established for such individual under the same applicable retirement plan. . . .”  22 If an amount that is transferred pursuant to the Form W-2 correction method or directly rolled over pursuant to the in-plan Roth rollover correction method is the first contribution to a participant's designated Roth account, then the 5-taxable-year-period begins with the taxable year for which the amount transferred or directly rolled over is includible in the participant's gross income (which, depending on the circumstances, could be the same taxable year in which the pre-tax elective deferral was made or the next taxable year).

Commenters also requested that the final regulations provide that an in-plan Roth rollover that is made as a correction for a section 414(v)(7) failure and distributed within the 5-taxable-year period that begins on January 1 of the year of the correction is not subject to the 5-year recapture rule under sections 402A(c)(4)(D) and 408A(d)(3)(F). 23 Commenters argued that the 5-year recapture rule should not apply in this circumstance because, if the pre-tax elective deferral had been correctly made as a designated Roth contribution, then the 5-year recapture rule would not apply to a later distribution of that designated Roth contribution.

The final regulations do not reflect these comments with respect to the 5-taxable-year period and the 5-year recapture rule because the Treasury Department and the IRS have determined that aligning the in-plan Roth rollover correction method with the existing provisions of section 402A(c)(4)(E)(ii) and (iii) would facilitate sound tax administration (for example, by requiring that the correction be consistently treated as an in-plan Roth rollover for purposes of Form 1099-R reporting). Thus, for example, if an in-plan Roth rollover that is made as a correction for a section 414(v)(7) failure is distributed within the 5-taxable-year period that begins on January 1 of the year in which the in-plan Roth rollover is made, then the distribution would be subject to a 10 percent additional tax under section 72(t) unless an exception applies under section 72(t)(2).

Under proposed § 1.414(v)-2(c)(2)(i), a plan would be permitted to provide for either correction method but, with respect to a plan year, the plan would be required to apply the same correction method for all participants with elective deferrals in excess of the same applicable limit.

Commenters requested that the final regulations not include the requirement that, with respect to a plan year, a plan apply the same correction method for all participants with elective deferrals in excess of the same applicable limit. Commenters argued that this requirement would discourage the use of the Form W-2 correction method due to the possibility that elective deferrals for some participants might be corrected using the Form W-2 correction method but other participants with elective deferrals in excess of the same applicable limit might not be identified until after the Forms W-2 for the year of the deferral have been filed or furnished to the participants. In such case, the in-plan Roth rollover correction method could not be used with respect to those later identified participants and their additional elective deferrals would be required to be distributed from the plan in accordance with a permitted correction method specific to the limit on elective deferrals that the additional elective deferrals exceeded.

In response to these comments, the final regulations do not require that, with respect to a plan year, a plan apply the same correction method for all participants with elective deferrals in excess of the same applicable limit. Instead, § 1.414(v)-2(c)(2)(i) provides flexibility by merely requiring that a plan apply the same correction method for similarly situated participants. Section 1.414(v)-2(c)(2)(i) provides further that the selection of which correction method applies may not be based on the investment returns earned in participants' accounts. For example, a plan may provide for correction using the Form W-2 correction method for all participants for whom the Forms W-2 for that year have not been filed or furnished and for correction using the in-plan Roth rollover correction method for all other participants.

Under proposed § 1.414(v)-2(c)(3)(i), a plan would be eligible to use the Form W-2 or in-plan Roth rollover correction method with respect to pre-tax elective deferrals that exceed a statutory limit described in § 1.414(v)-1(b)(1)(i) (such as contributions that exceed the section 401(a)(30) limit or that result in the participant's annual additions exceeding the section 415(c) limit) only if the plan sponsor or plan administrator has in place practices and procedures designed to result in compliance with section 414(v)(7) at the time an elective deferral is made. 24 A plan would not meet this requirement unless the plan provides for a deemed Roth catch-up election in accordance with proposed § 1.401(k)-1(f)(5)(iii) and (iv). Under the deemed Roth catch-up election approach, if a participant who is subject to the Roth catch-up requirement has made pre-tax elective deferrals for a calendar year that equal the section 401(a)(30) limit for the taxable year that begins in the calendar year, then subsequent elective deferrals made by the participant in the calendar year would automatically be made as designated Roth contributions, even if the participant has not made an affirmative election to make catch-up contributions as designated Roth contributions. Similarly, if such a participant has made pre-tax elective deferrals for a limitation year that result in the participant's annual additions for the limitation year equaling the section 415(c) limit, then subsequent elective deferrals made by the participant in the limitation year would automatically be treated as designated Roth contributions.

Although commenters generally agreed that a plan should be permitted to provide for a deemed Roth catch-up election, commenters requested that the final regulations not include the proposed requirement that a plan provide for the deemed Roth catch-up election in order for the Form W-2 or in-plan Roth rollover correction method to be used to correct a pre-tax elective deferral that exceeds a statutory limit. Commenters argued that a deemed Roth catch-up election could be viewed as impractical or less efficient than collecting affirmative designated Roth contribution elections, would need to be negotiated with respect to collectively bargained plans, and potentially could be prohibited under State or local law.

Section 1.414(v)-2(c)(3)(i)(B) of the final regulations generally retains the requirement that a plan provide for a deemed Roth catch-up election in order for the Form W-2 or in-plan Roth rollover correction method to be used to correct a pre-tax elective deferral that exceeds a statutory limit. 25 However, the Treasury Department and the IRS note that § 1.401(k)-1(f)(5)(iv) of the final regulations also retains the requirement that a plan offer to a participant who is subject to a deemed Roth catch-up contribution election an effective opportunity to make a different election (that is, an election to make pre-tax catch-up contributions or to make no catch-up contributions). The Treasury Department and the IRS believe that concerns relating to compliance with the terms of a collective bargaining agreement or applicable State or local law would be mitigated by a participant's ability to make an election to override any deemed Roth treatment by the plan.

In addition, in response to commenters and as noted previously in section III.B.1. of this preamble, the final regulations reduce the potential administrative burden of this requirement by removing the requirement that a plan take into account any designated Roth contributions that a participant made earlier in a calendar year for purposes of applying the deemed Roth catch-up election. Thus, under the final regulations, in order for a plan to use the Form W-2 or in-plan Roth rollover correction method to correct a pre-tax elective deferral that exceeds a statutory limit, the plan must provide that the elective deferrals of a participant who is subject to the Roth catch-up requirement are automatically treated as designated Roth contributions either: (1) after the participant's total elective deferrals made during the calendar year (including elective deferrals made as designated Roth contributions) exceed the section 401(a)(30) limit on elective deferrals for the taxable year that begins in the calendar year, or (2) after the participant's pre-tax elective deferrals made during the calendar year exceed the section 401(a)(30) limit on elective deferrals for the taxable year that begins in the calendar year.

In addition, § 1.414(v)-2(c)(3)(i)(B) clarifies that, although a plan must provide a participant who is subject to the deemed Roth catch-up election with an effective opportunity to make a new election that is different than the deemed election, if a plan implements a participant's affirmative pre-tax catch-up contribution election, the plan must then determine whether the participant's affirmative pre-tax catch-up contribution election is permissible (taking into account any designated Roth contributions made by the participant earlier in the calendar year). If the participant's affirmative pre-tax catch-up contribution election is impermissible, then the section 414(v)(7) failure generally must be corrected.

The final regulations also provide that, in the case of an employee participating in a section 403(b) plan for whom the section 402(g) limit is increased pursuant to section 402(g)(7), the plan is permitted to provide that the automatic treatment of additional elective deferrals as designated Roth contributions applies either: (1) after the employee's elective deferrals under the plan for the calendar year exceed the section 401(a)(30) limit on elective deferrals for the taxable year that begins in the calendar year, increased by the amount described in section 402(g)(7)(A), or (2) after the employee's pre-tax elective deferrals under the plan for the calendar year exceed the section 401(a)(30) limit on elective deferrals for the taxable year that begins in the calendar year, increased by the amount described in section 402(g)(7)(A).

Similarly, the final regulations provide that, in the case of an eligible governmental 457(b) plan, the automatic treatment of additional elective deferrals as designated Roth contributions generally applies with respect to the corresponding limit of section 457(b)(2). However, a plan is permitted to provide that the automatic treatment of additional elective deferrals as designated Roth contributions applies once the amount deferred under the plan for the taxable year exceeds the section 457(b)(3) limit for the participant.

Under proposed § 1.414(v)-2(c)(3)(ii), a plan would not fail to meet the requirement to have in place practices and procedures that are designed to result in compliance with the Roth catch-up requirement at the time an elective deferral is made merely because the plan determines the applicability of the Roth catch-up requirement to a participant solely on the basis of the participant's FICA wages from the employer sponsoring the plan for the preceding calendar year as reported on a timely-filed Form W-2 with respect to the participant. However, as explained in section III.C.3.a of the preamble to the proposed regulations (“Prerequisite to Correct Certain Section 414(v)(7) Failures Under the New Correction Methods”), the fact that a plan would not fail to meet the requirement to have in place practices and procedures did not mean that the plan would not have to correct any pre-tax catch-up contributions that should have been designated Roth contributions if the amount of a participant's FICA wages for the preceding calendar year that is timely reported on a Form W-2 is later determined to be incorrect. The Treasury Department and the IRS invited comments on whether there are scenarios in which it would not be appropriate to require correction of pre-tax catch-up contributions that are required to be designated Roth contributions on the basis of a subsequent determination that the amount of FICA wages reported on the Form W-2 was incorrect. The final regulations retain the rule included in proposed § 1.414(v)-2(c)(3)(ii). However, in response to comments received and as explained in section III.C.4 of this Summary of Comments and Explanation of Revisions (“Correction not required in certain circumstances”), the final regulations do not require the correction of a section 414(v)(7) failure if a participant became subject to section 414(v)(7)(A) solely because the participant's FICA wages for the calendar year preceding the calendar year in which the taxable year begins were not determined to exceed the Roth catch-up wage threshold until after the deadline for correction in § 1.414(v)-2(c)(3)(iii).

Under proposed § 1.414(v)-2(c)(3)(iii), the deadline to correct a section 414(v)(7) failure would depend on which limit is the basis for the pre-tax elective deferral being designated a catch-up contribution. For example, if the elective deferral is a catch-up contribution because it exceeds the section 401(a)(30) limit on elective deferrals, then, consistent with § 1.402(g)-1(e), the deadline to complete the corrective steps under proposed § 1.414(v)-2(c)(2) would be April 15 of the calendar year following the calendar year for which the elective deferral was made. Further, the proposed regulations would include separate deadlines with respect to the section 415(c) limit and with respect to the ADP limit or an employer-provided limit.

Commenters generally recommended that the correction deadlines set forth in the proposed regulations be simplified and that a later deadline should be provided under the final regulations. Commenters provided various suggestions for a single correction deadline (for example, the close of the calendar year following the calendar year in which the pre-tax elective deferrals were made) or for extended correction deadlines in certain circumstances (for example, with respect to the ADP limit, 12 months after the close of the plan year in which the excess contribution arose). One commenter also requested the consideration of correction options that would limit administrative burden to plans and prevent double taxation for participants (for example, by not requiring the inclusion of a pre-tax deferral in excess of the section 401(a)(30) limit in a participant's gross income for the year in which the deferral was made and for the year in which the participant receives a corrective distribution).

In response to these comments, § 1.414(v)-2(c)(3)(iii) of the final regulations provides that, if a section 414(v)(7) failure arises with respect to an elective deferral that is a catch-up contribution because it exceeds a statutory limit within the meaning of § 1.414(v)-1(b)(1) (which would include, for example, the section 401(a)(30) limit and the section 415(c) limit), the deadline to complete all corrective steps required under § 1.414(v)-2(c)(2) in order to avoid a qualification failure is the last day of the taxable year following the taxable year for which the elective deferral was made. If the section 414(v)(7) failure arises with respect to an elective deferral that is a catch-up contribution because it exceeds an employer-provided limit as described in § 1.414(v)-1(b)(1)(ii) or the ADP limit, the deadline to complete the corrective steps required under § 1.414(v)-2(c)(2) in order to avoid a qualification failure is the last day of the plan year following the plan year for which the catch-up contribution was made.

However, a pre-tax elective deferral that must be corrected due to a section 414(v)(7) failure is not treated as a catch-up contribution prior to the date that the failure is corrected under § 1.414(v)-2(c)(2). This means that if there are consequences for failing to be a catch-up contribution which apply before the deadline for making the correction in § 1.414(v)-2(c)(3)(iii), those consequences will apply with respect to the additional elective deferral (even if the correction is made by that deadline).

For example, under § 1.414(v)-2(c)(3)(iii)(A), in the case of an elective deferral that is a catch-up contribution because it exceeds the section 401(a)(30) limit on elective deferrals, if all corrective steps required under § 1.414(v)-2(c)(2) are not completed by April 15 following the close of the taxable year for which the elective deferral was made, then the excess deferral will not be treated as having been corrected by the deadline in § 1.402(g)-1(e)(2)(ii). Thus, the excess deferral will be subject to the tax treatment rules of § 1.402(g)-1(e)(8)(iii). Similarly, if a section 414(v)(7) failure arises with respect to an elective deferral that is a catch-up contribution because it exceeds an employer-provided limit, the contribution is not excluded from being taken into account as a catch-up contribution for purposes of the ADP test of section 401(k)(3) pursuant to § 1.401(k)-2(a)(5)(iii) before the correction for the section 414(v)(7) failure occurs.

Section 1.414(v)-2(c)(3)(iii)(C) of the final regulations provides that if a section 414(v)(7) failure arises with respect to an elective deferral that is a catch-up contribution because it exceeds the ADP limit, the contribution is not excluded from the requirement to distribute excess contributions as a catch-up contribution pursuant to § 1.401(k)-2(b)(4)(v) before the correction for the section 414(v)(7) failure occurs. The final regulations align with the existing section 401(k) regulations for the correction of an excess contribution by clarifying that, if a plan does not correct excess contributions within 2- 1/2 months after the close of the plan year for which the excess contributions are made (as extended to 6 months under § 1.401(k)-2(b)(5)(iii) in the case of certain applicable employer plans that include an eligible automatic contribution arrangement within the meaning of section 414(w)), then the employer will be liable for a 10% excise tax under section 4979 on the amount of the excess contributions that were not distributed timely.

Commenters requested that Treasury and the IRS address whether there are circumstances in which a pre-tax elective deferral in excess of an applicable limit that fails to comply with section 414(v)(7)(A) would not need to be corrected in order for section 414(v)(1) to apply and requested that correction not be required in certain circumstances. Commenters requested that the final regulations include a de minimis exception under which pre-tax elective deferrals that do not exceed a specified threshold (for example, $250) would not need to be corrected. One commenter also requested that the final regulations permit a plan to rely on a participant's final Form W-2 for a year when determining whether the participant is subject to the Roth catch-up requirement and not require correction in the event that the participant's FICA wages are later adjusted. An example would be a participant whose Form W-2 for the preceding calendar year indicates that FICA wages did not exceed the Roth catch-up wage threshold, but whose FICA wages are later adjusted as a result of an employment tax examination, if the adjusted FICA wages for the participant exceed the Roth catch-up wage threshold.

In response to these comments, § 1.414(v)-2(c)(4) sets forth two circumstances in which a pre-tax elective deferral in excess of an applicable limit that fails to comply with section 414(v)(7)(A) would not need to be corrected in order for the elective deferral to be treated as a catch-up contribution. First, correction is not required if the amount of the pre-tax elective deferral that was required to be a designated Roth contribution does not exceed $250. For purposes of applying this $250 threshold, earnings and losses on the pre-tax elective deferral are not taken into account. Second, correction is not required if the participant became subject to section 414(v)(7)(A) solely because the participant's FICA wages for the calendar year preceding the calendar year in which the taxable year begins were not determined to exceed the Roth catch-up wage threshold until after the deadline for correction in § 1.414(v)-2(c)(3)(iii).

One commenter requested that the final regulations not require a correction after a significant passage of time (for example, after the statute of limitations has run on the participant's tax return for the taxable year in which the pre-tax elective deferral should have been made as a designated Roth contribution) or after the amount that would otherwise be required to be transferred or directly rolled over to the participant's designated Roth account has been distributed from the plan. As a general matter, in order to remain qualified, any failure to meet the qualification requirements must be corrected even if all applicable statutes of limitations on assessment for the year in which the failure occurred have closed. The final regulations do not alter this general principle.

Another commenter requested that the final regulations address the correction method for a participant who is subject to the Roth catch-up requirement, is permitted to make pre-tax catch-up contributions, and subsequently takes a distribution of the participant's entire account balance before the plan has an opportunity to correct the failure. Distribution of such an amount would satisfy the qualification requirements without the need for any additional rules in these final regulations. However, under § 1.402(c)-2(c)(3)(i) through (iii), the portion of the distribution attributable to the pre-tax catch-up contributions would not be an eligible rollover distribution.

One commenter requested confirmation that a plan amendment that is made pursuant to section 603 of the SECURE 2.0 Act would not be a prohibited mid-year change described in section III.D of Notice 2016-16, 2016-7 IRB 318. 26 The Treasury Department and the IRS have determined that, for purposes of section III.D of Notice 2016-16, a plan amendment that is made pursuant to section 603 of the SECURE 2.0 Act, or any regulation relating to that provision, is not a prohibited mid-year change.

One commenter requested clarification that correction methods similar to the in-plan Roth rollover correction method would be available to an eligible governmental 457(b) plan for a violation of section 457(c). The commenter noted that, in the proposed regulations, the deadlines for using the in-plan Roth rollover correction method would refer to violations of section 401(a)(30), which does not apply to section 457(b) plans. As described in section III.C.3.b of this Summary of Comments and Explanation of Revisions (“Deadline to correct section 414(v)(7) failures”), a single correction deadline applies for all section 414(v)(7) failures that arise with respect to an elective deferral that is a catch-up contribution because it exceeds a statutory limit within the meaning of § 1.414(v)-1(b)(1). A statutory limit within the meaning of § 1.414(v)-1(b)(1) includes the limit provided in section 457(b)(2) (without regard to section 457(b)(3)).

Commenters also requested that eligible governmental 457(b) plans be permitted to include a deemed Roth catch-up election, as permitted for section 401(k) and section 403(b) plans. These final regulations do not make any revisions to the regulations relating to eligible governmental 457(b) plans because those regulations do not currently provide for the inclusion of a qualified Roth contribution program in an eligible governmental 457(b) plan. 27

The proposed amendments to §§ 1.401(k)-1 and 1.403(b)-3 were proposed to apply for taxable years beginning after December 31, 2023. The proposed amendments to § 1.414(v)-1 generally were proposed to apply with respect to contributions in taxable years that begin more than 6 months after the date that final regulations amending § 1.414(v)-1 are issued. However, under the proposed regulations, a taxpayer would have been permitted to elect to apply the regulatory provisions relating to sections 109 and 117 of the SECURE 2.0 Act as early as the statutory applicability dates.

For a plan that is not maintained pursuant to a collective bargaining agreement, proposed § 1.414(v)-2 was proposed to apply with respect to contributions in taxable years beginning more than 6 months after the date that final regulations adding § 1.414(v)-2 to the Code of Federal Regulations are issued. For a plan that is maintained pursuant to one or more collective bargaining agreements, proposed § 1.414(v)-2 was proposed to apply with respect to contributions in taxable years beginning after the later of the first taxable year described in the preceding sentence, or the first taxable year that begins after the date on which the last collective bargaining agreement related to the plan that is in effect on December 31, 2025, terminates (determined without regard to any extension of those agreements). However, under the proposed regulations, a plan would be permitted to apply § 1.414(v)-2 with respect to contributions in taxable years beginning after December 31, 2023.

Many commenters requested a later applicability date for the final regulations and a reasonable, good-faith standard for interpretation of the statute in advance of the applicability date of the final regulations. Some of these commenters specifically requested delays for governmental plans or for plans that are maintained pursuant to one or more collective bargaining agreements. Other commenters requested an extension of the administrative transition period provided under Notice 2023-62.

In general, the applicability dates under the final regulations are based on the applicability dates set forth in the proposed regulations. Thus, for example, § 1.414(v)-2 is generally applicable for taxable years beginning after December 31, 2026. The Treasury Department and the IRS have determined that this regulatory applicability date provides an adequate period for implementation of the provisions of the final regulations. The final regulations do not extend or modify the administrative transition period provided under Notice 2023-62.

However, in response to comments, § 1.414(v)-2(e)(2)(iii) of the final regulations extends the regulatory applicability date of § 1.414(v)-2 in the case of a governmental plan within the meaning of section 414(d), as described in the Applicability Dates section of this preamble. In addition, the Treasury Department and the IRS understand that multiemployer plans would benefit from a further extended applicability date for the Roth catch-up requirement because of the unique issues faced by those plans. For example, multiemployer plans do not have access to or control over their contributing employers' payroll systems and thus must implement complex administrative coordination procedures to comply with the Roth catch-up requirement. Therefore, in response to comments, § 1.414(v)-2(e)(2)(ii) of the final regulations provides that if that plan is a multiemployer plan as defined in section 414(f), section 414(v)(7) is deemed satisfied until the first taxable year described in the Applicability Dates section of this preamble.

The amendments to §§ 1.401(k)-1 and 1.403(b)-3 apply for taxable years beginning after December 31, 2023. The amendments to § 1.414(v)-1 apply with respect to contributions in taxable years beginning after December 31, 2026. However, the regulations permit a taxpayer to elect to apply (1) § 1.414(v)-1(c)(2)(ii)(C) and (c)(2)(iii)(C) (relating to the higher catch-up limit for certain newly-established SIMPLE plans) with respect to taxable years beginning after December 31, 2023, and (2) § 1.414(v)-1(c)(2)(i)(B), (c)(2)(ii)(B), and (c)(2)(iii)(B) (relating to the higher catch-up limit applicable during the taxable year of attainment of age 60 through 63) with respect to taxable years beginning after December 31, 2024.

For a plan that is not maintained pursuant to a collective bargaining agreement and not a governmental plan within the meaning of section 414(d), § 1.414(v)-2 applies with respect to contributions in taxable years beginning after December 31, 2026. For a plan that is maintained pursuant to one or more collective bargaining agreements, § 1.414(v)-2 applies with respect to contributions in taxable years beginning after the later of the first taxable year described in the preceding sentence, or the first taxable year that begins after the date on which the last collective bargaining agreement related to the plan that is in effect on December 31, 2025, terminates (determined without regard to any extension of those agreements). Further, if that plan is a multiemployer plan as defined in section 414(f), section 414(v)(7) is deemed satisfied until the first taxable year beginning after the date on which the last collective bargaining agreement related to the plan that is in effect on November 17, 2025 terminates (determined without regard to any extension to those agreements). In the case of a governmental plan within the meaning of section 414(d), § 1.414(v)-2 applies with respect to contributions in taxable years beginning after the later of the first taxable year beginning after December 31, 2026, or the first taxable year beginning after the close of the first regular legislative session of the legislative body with the authority to amend the plan that begins after December 31, 2025. However, a plan is permitted to apply § 1.414(v)-2 with respect to contributions in taxable years beginning after December 31, 2023.

Prior to the applicability date of the final regulations, a reasonable, good faith interpretation standard applies with respect to the statutory provisions reflected in the final regulations. For example, with respect to contributions in taxable years prior to the applicability date of the final regulations, this standard would be met if the determination of whether a participant's FICA wages for the preceding calendar year exceeded the Roth catch-up wage threshold is made by referencing the FICA taxes imposed by sections 3101(b) and 3111(b) (rather than sections 3101(a) and 3111(a)).

These final regulations are not subject to review under section 6(b) of Executive Order 12866 pursuant to the Memorandum of Agreement (July 4, 2025) between the Treasury Department and the Office of Management and Budget regarding review of tax regulations.

The Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520) requires that a Federal agency obtain the approval of the Office of Management and Budget (OMB) before collecting information from the public, whether such collection of information is mandatory, voluntary, or required to obtain or retain a benefit. A Federal agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid control number.

These regulations contain reporting requirements, contained in § 1.414(v)-2(c), that relate to corrections of pre-tax elective deferrals that are catch-up contributions subject to the requirement under section 414(v)(7)(A) of the Code to be designated Roth contributions. These collections of information generally will be used by the IRS for tax compliance purposes and may involve submission of a Form 1099-R or a Form W-2 to the IRS. The Form 1099-R and its associated burden are approved by the OMB under 1545-0119. The Form W-2 and its associated burden are approved by the OMB under 1545-0029. The regulation does not change the reporting procedures already established for these forms.

The regulations also contain a recordkeeping requirement that plan administrators maintain written practices and procedures designed to result in real-time compliance with certain requirements of section 414(v)(7)(A). These recordkeeping requirements are expected to be usual and customary business practices that impose no additional burden on respondents. Therefore, the recordkeeping requirement does not require OMB approval under 5 CFR 1320.3(b)(2).

Pursuant to the Regulatory Flexibility Act (5 U.S.C. chapter 6), it is hereby certified that these regulations will not have a significant economic impact on a substantial number of small entities. These regulations will affect individuals and businesses, some of which may be small entities.

Even if a substantial number of small entities will be affected, the economic impact of these regulations is not expected to be significant. As discussed in the Paperwork Reduction Act section of this preamble, these regulations may involve reporting and ordinary recordkeeping but are not expected to result in an increase in estimated burden. Any additional recordkeeping or administrative costs resulting from the changes relating to catch-up contributions that apply to certain section 401(k) plans, section 403(b) plans, and eligible governmental 457(b) plans sponsored by small entities are consistent with existing procedures and are not expected to be significant. Therefore, a regulatory flexibility analysis under the Regulatory Flexibility Act is not required.

Pursuant to section 7805(f) of the Code, the notice of proposed rulemaking preceding these regulations was submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on their impact on small businesses and no comments were received.

Section 202 of the Unfunded Mandates Reform Act of 1995 requires that agencies assess anticipated costs and benefits and take certain other actions before issuing a final rule that includes any Federal mandate that may result in expenditures in any one year by a State, local, or Tribal government, in the aggregate, or by the private sector, of $100 million in 1995 dollars, updated annually for inflation. The regulations do not include any Federal mandate that may result in expenditures by State, local, or Tribal governments, or by the private sector, in excess of that threshold.

Executive Order 13132 (Federalism) prohibits an agency from publishing any rule that has federalism implications if the rule either imposes substantial, direct compliance costs on State and local governments, and is not required by statute, or preempts State law, unless the agency meets the consultation and funding requirements of section 6 of the Executive order. The regulations do not have federalism implications, impose substantial direct compliance costs on State and local governments, or preempt State law within the meaning of the Executive order.

Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq. ), the Office of Information and Regulatory Affairs designated this rule as a major rule, as defined by 5 U.S.C. 804(2).

IRS Revenue Procedures, Revenue Rulings notices, and other guidance cited in this document are published in the Internal Revenue Bulletin (or Cumulative Bulletin) and are available from the Superintendent of Documents, U.S. Government Publishing Office, Washington, DC 20402, or by visiting the IRS website at http://www.irs.gov.

The principal authors of these regulations are Kara M. Soderstrom, Christina M. Cerasale, and Jessica S. Weinberger of the Office of the Associate Chief Counsel (Employee Benefits, Exempt Organizations, and Employment Taxes (EEE)). However, other personnel from the Treasury Department and the IRS participated in the development of the proposed regulations.

Accordingly, 26 CFR part 1 is amended as follows:

On May 3, 2022, the Coast Guard published a Notification of Inquiry (NOI); request for comments in the Federal Register (87 FR 26145). This NOI sought information from waterway users in response to provided questions. Those questions focused on waterway usage and navigation in the vicinity of the railroad and highway bridges. On June 10, 2022, a Supplemental Notification of Inquiry (SNOI); request for comments was published in the Federal Register (87 FR 35472). The SNOI provided clarification on the Coast Guard's intent in gathering information. The Coast Guard was seeking information regarding usage and equitable access to the waterway. We received a total of 2358 comments on those publications. Those comments were taken into consideration when developing the temporary test deviation published on June 8, 2023.

On June 8, 2023, the Coast Guard published a notice titled “Temporary deviation from regulations; request for comments” in the Federal Register (88 FR 37470) (Temporary Deviation 1). The deviation was effective from 12:01 a.m. on June 21, 2023, through 11:59 p.m. on December 17, 2023. Under Temporary Deviation 1, the railroad bridge opened twice an hour upon request and was required to remain in the open position if trains were not crossing the bridge. Additional operating requirements were specified by the Coast Guard. The comment period ended on August 4, 2023, with 371 comments received. Those comments were taken into consideration when developing Temporary Deviation 2, which was published on August 11, 2023.

On August 11, 2023, the Coast Guard published a notice titled “Temporary deviation from regulations; cancellation” in the Federal Register (88 FR 54488). This action cancelled Temporary Deviation 1, as it was determined FEC Railway (FECR) was experiencing extreme difficulty meeting the requirements of the temporary deviation.

On August 11, 2023, the Coast Guard also published a notice titled “Temporary deviation from regulations; request for comments” in the Federal Register (88 FR 54487) (Temporary Deviation 2). The deviation was effective from 12:01 a.m. on August 15, 2023, through 11:59 p.m. on December 17, 2023. Under Temporary Deviation 2, the railroad bridge was maintained in the fully open-to-navigation position, except during periods when it closed for the passage of train traffic. Additional operating requirements were specified by the Coast Guard, one of which was a fixed 15-minute opening period each hour. The comment period ended October 15, 2023, with 211 comments received. Those comments were addressed in Temporary Deviation 3, which was published on February 6, 2024.

On November 7, 2023, the Coast Guard published a notice titled “Temporary deviation from regulations; reopening the comment period” in the Federal Register (88 FR 76666). This action was necessary due to a delay in the start of passenger rail service. Due to the delay, the public was not afforded adequate opportunity to provide comments on Temporary Deviation 2 during actual passenger rail service operations. The comment period ended November 30, 2023, with 4 comments received. Those comments were addressed in Temporary Deviation 3, which was published on February 6, 2024.

On December 7, 2023, the Coast Guard published a notice titled “Temporary deviation from regulations; modification” in the Federal Register (88 FR 85111). The deviation was effective from 12:01 a.m. on December 18, 2023, through 11:59 p.m. on February 11, 2024. This action extended Temporary Deviation 2 to allow for the review of public comments, while providing continuity in the operation of the drawbridge. An additional comment period was not provided for the extension of Temporary Deviation 2 since multiple comment periods had already been provided.

On February 6, 2024, the Coast Guard published a notice titled “Temporary deviation from regulations; request for comments” in the Federal Register (89 FR 8074) (Temporary Deviation 3). The deviation was effective from 12:01 a.m. on February 12, 2024, through 11:59 p.m. on August 9, 2024. Under Temporary Deviation 3, the railroad bridge was maintained in the fully open-to-navigation position, except during periods when it closed for the passage of train traffic. Additional operating requirements were specified by the Coast Guard, one of which was a fixed 10-minute opening period each hour. The comment period ended May 6, 2024, with one comment received. That comment is addressed in the NPRM, which was published on March 25, 2025 (90 FR 13573).

On August 7, 2024, the Coast Guard published a Temporary Interim Rule (TIR) with request for comments in the Federal Register (89 FR 64367). The temporary interim rule was effective from August 9, 2024, through 11:59 p.m. on December 31, 2024. This action was necessary to allow for continuity of drawbridge operations while the Coast Guard reviewed comments, and the Coast Guard Commissioned Marine Traffic Study of the Okeechobee Waterway (St. Lucie) (study) associated with the temporary test deviation. The comment period for the TIR ended September 23, 2024, with one comment received. That comment is addressed in the NPRM, which was published on March 25, 2025 (90 FR 13573).

On February 7, 2025, the Coast Guard published a TIR with request for comments in the Federal Register (90 FR 9126). The temporary interim rule was effective from February 7, 2025, through 11:59 p.m. on May 31, 2025. This action allowed for continuity for drawbridge operations while the Coast Guard evaluates documentation received for a request to permanently change the operating regulation. The comment period for the TIR ended March 10, 2025, with 22 comments received, and those comments are addressed in Section IV of this Final Rule.

On March 25, 2025, the Coast Guard published a NPRM entitled “Drawbridge Operation Regulation; Okeechobee Waterway, Stuart, FL” in the Federal Register (90 FR 13573). There we stated why we issued the NPRM and invited comments on our proposed regulatory change. During the comment period that ended April 24, 2025, we received two comments, and those comments are addressed in Section IV of this Final Rule.

On May 19, 2025, the Coast Guard published a TIR in the Federal Register (90 FR 21223). The temporary interim rule is effective from June 1, 2025, through 11:59 p.m. on September 30, 2025. This action allowed for continuity for drawbridge operations while the Coast Guard evaluates documentation received for a request to permanently change the operating regulation.

The Coast Guard is issuing this rule under authority 33 U.S.C. 499.

The Florida East Coast (FEC) Railroad Bridge across the Okeechobee Waterway (OWW), mile 7.41, at Stuart, FL, is a single-leaf bascule bridge with a six-foot vertical clearance at mean high water in the closed position. The normal operating schedule for the bridge is found in 33 CFR 117.317(c).

Railway activity has significantly increased across the FEC Railroad Bridge. The Coast Guard is changing the operating regulation for the railroad bridge to allow the drawbridge to operate a more predictable and reliable schedule to meet the needs of competing modes of transportation.

The Coast Guard received 22 comments from the TIR published February 7, 2025. Fifteen comments were neither in support of nor against the proposed rule but instead made statements regarding the railroad's perceived failure to adhere to the specific requirements of the proposed rule. Comments stated the bridge is not maintained in the open to navigation position when trains are not crossing and does not open immediately after trains pass. This section of the FEC train corridor is a single track which requires the bridge to remain in the down position when trains approach the bridge or are in the track circuit or “block”. When trains occupy the block for the railroad bridge, they may not be visible from the waterway, and it may appear the bridge is remaining down needlessly. Per federal railway regulations, the block is a safety signal system leading up to the bridge that requires the bridge to remain down until the train moves outside of the block (safety signal) and prevents a train from entering a block already occupied by another train. Again, this bridge crossing is single track and it may take longer for trains to clear the block before another train is permitted to enter and cross the bridge. FEC has scheduled trains to cross the bridge close to each other to reduce the amount of time the bridge is closed to navigation.

Comments stated the mobile application is not reliable. The mobile application displays a daily schedule when the drawbridge is open and closed to navigation. Bridge tender logs indicate the drawbridge is operating similarly in conjunction with the mobile application. There are minor discrepancies when the drawbridge closes or remains closed when the mobile application indicates it is open to navigation and these incidents are attributed to complex railroad operations or incidents along the railroad corridor. However, there are instances when the drawbridge is open when the mobile application indicates it is in the down or closed position. FEC is complying with the fixed 10-minute opening period at the top of each hour from 6 a.m. to 8 p.m. FEC is required to update the mobile application in a timely manner when these incidents occur. The mobile application provides the mariner with reliable information while competing with other modes of transportation.

Comments stated the signage is insufficient and difficult to see. The signage is electronic on a digital board that provides more information than typical bridge signage and is similar in letter height. Mariners can also contact the bridge tender on marine radio channel 9. The Coast Guard does not have the authority to require a bridge owner to post specific requirements on any structure other than the actual bridge structure. We find that the signage is sufficient as it provides the required information.

Comments stated that reducing the total shared hours by two hours is not reasonable for navigation. The drawbridge is required to remain open when trains are not crossing, and it is not allowed to remain closed to navigation for more than 60 consecutive minutes from 8:01 p.m. until 5:59 a.m. daily. The Coast Guard determined that from 8:01 p.m. until 5:59 a.m. requiring the drawbridge to be locally manned with a fixed 10-minute opening at the top of the hour was not necessary as marine traffic was not robust.

One commenter provided several recommendations that are not reasonable for the area and outside the scope of Coast Guard Bridge Program authority. They stated the current schedule does not satisfy the needs of marine navigation, leading to economic losses for commercial vessels and local businesses. The commenter did not provide evidence that the proposed schedule, which has been active under the TIR for the past year and a half, has led to economic losses for the community. The commenter recommended a structured daily schedule, and the schedule should be easily accessible via online platform. The mobile application satisfies this recommendation. Additionally, the commenter recommended a priority reservation system for vessels should be implemented which would require the bridge to open based on vessels with pressing time constraints. This is unreasonable and unnecessary as the drawbridge is required to be maintained in the open position when trains are not crossing and a 10-minute opening at the top of the hour is provided, which mariners can plan for.

One comment stated the Coast Guard should allow marine traffic access under the bridge and that it is unfair for a private company to stop marine traffic for more than fifty percent of an hour. The proposed rule provides for reasonable access for competing modes of transportation that all users can plan for based on the final schedule.

A commercial property owner stated the excessive closure of the railroad bridge to marine traffic is detrimental to his tenants that use his property for their marine construction businesses and boat storage. There is no evidence provided by commenters that the proposed schedule, which has been active under the TIR for the past year and a half, has been detrimental to the marine industry nor is closed excessively. The bridge logs indicate, overall, the bridge owner is complying with the proposed rule. The commenter also stated during approaching hurricanes, mariners can't access their facility in a timely manner to avoid the storm. During Hurricane Season, multiple federal, state, and local agencies coordinate to ensure the public, including the boating public, are aware of storms. The information provided includes, but is not limited to, evacuation routes, roadway and bridge closures. The Coast Guard coordinates with bridge owners to ensure waterway access is available for mariners seeking safe haven and also provides the bridge owner with sufficient time to secure moveable bridges to prevent storm damage. Mariners are advised to follow emergency orders and plan early vessel movements to ensure they have access to waterways prior to the lockdown of moveable bridges due to approaching storms.

There were four comments outside the scope of the TIR that we determined were not actionable.

The Coast Guard received two comments on the NPRM published on March 25, 2025. The two comments were unrelated to the substance of the proposed rule.

This rule changes the operating schedule from the generic requirement of “open to navigation except when trains are crossing”, to defining specific operating requirements, one of which is a fixed 10-minute opening period each hour. The rule allows the drawbridge to operate on a more predictable and reliable schedule to meet the needs of competing modes of transportation due to the significant increase in railway activity.

This rule specifies that the drawbridge will not be closed for more than 50 consecutive minutes in any given hour during daytime operations (6 a.m. to 8 p.m.) and for more than 7 total hours during daytime operations (6 a.m. to 8 p.m.). The drawbridge will open and remain open to navigation for a fixed 10-minute period at the top of each hour from 6 a.m. to 8 p.m. At night from 8:01 p.m. until 5:59 a.m. daily, the drawbridge will remain in the fully open-to-navigation position, except during periods when it is closed for the passage of train traffic, to conduct inspections, and to perform maintenance and repairs authorized by the Coast Guard. The drawbridge will not be closed more than 60 consecutive minutes during this night and early morning time frame.

Lastly, if a train is in the track circuit at the start of a fixed opening period, the opening may be delayed up to, but not more than, five minutes. Once the train has cleared the circuit, the bridge must open immediately for navigation to begin the fixed opening period.

We developed this rule after considering numerous statutes and Executive Orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive Orders.

The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as amended, requires federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities for the following reasons. The drawbridge must open at the top of the hour for 10 minutes during the day time which gives predictability and planning to small entities needing to transit the bridge. If a train is in the track circuit at the start of a fixed opening period, the opening may be delayed up to, but not more than, five minutes. Once the train has cleared the circuit, the bridge must open immediately for navigation to begin the fixed opening period. In addition, the drawbridge will not be closed for more than 50 consecutive minutes in any given hour during daytime operations (6 a.m. to 8 p.m.) and for more than 7 total hours during daytime operations (6 a.m. to 8 p.m.). This ensures the small businesses affected are not delayed for more than 50 minutes during day time hours if a train is passing. In the evenings and early mornings, from 8:01 p.m. until 5:59 a.m. daily, the drawbridge will remain in the fully open-to-navigation position, except during periods when it is closed for the passage of train traffic or other authorized actions by the Coast Guard. We tailored this schedule to reduce the effect on small entities, give predictability to all users, reduce unforeseen delays, and included contingency planning for when the railroad needs cause the drawbridge to remain closed during planned openings.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule affects your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the FOR FURTHER INFORMATION CONTACT section.

Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.

This rule calls for no new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.

Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.

We have analyzed this rule under Department of Homeland Security Management Directive 023-01, Rev.1, associated implementing instructions, and Environmental Planning Policy COMDTINST 5090.1 (series) which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f). The Coast Guard has determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule promulgates the operating regulations or procedures for drawbridges and is categorically excluded from further review, under paragraph L49, of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1.

Neither a Record of Environmental Consideration nor a Memorandum for the Record are required for this rule.

For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 117 as follows:

In October of 2024, the United States Environmental Protection Agency (EPA), Pilkington North America, Inc. (PNA), Illinois Environmental Protection Agency (IEPA), and the United States Coast Guard (USCG) began discussions to explore establishing a Regulated Navigation Area for Operable Unit 2 (OU2) of the Ottawa Township Flat Glass (OTFG) Superfund Alternative Site (the Site; EPA ID: ILD005468616) along the Illinois River. The purpose of this Regulated Navigation Area is to prevent disturbance of riverbed sediment in OU2 that has been contaminated with arsenic due to historic Site operations.

In 2000, PNA characterized arsenic contamination in Illinois River sediment, and collected sediment samples and conducting bathymetric surveys with EPA oversight. Sampling results indicated that arsenic concentrations in sediment adjacent to the Site and Original Sand Pond source area on the north side of the Illinois River were above background levels. PNA performed additional work in 2002 to determine if sediment deposits within OU2 were stable and to evaluate whether arsenic exceedances had an adverse impact on benthic organisms living in the sediment. Through various sampling efforts, radioisotope, and bioassay studies conducted by the State of Illinois and PNA, EPA concluded that contaminated arsenic sediment deposits in OU2 were stable, not prone to washout by yearly flood events, and had negligible effect on river water quality or toxicity to aquatic organisms. As part of the 2023 Five-Year Review for the Site, EPA recommended that a no anchorage area be established along the OU2 portion of the Illinois River to prohibit the disturbance of contaminated sediment. In December of 2024, EPA identified for the Coast Guard the appropriate area for a Regulated Navigation Area.

In response, on June 16, 2025, the Coast Guard published a notice of proposed rulemaking (NPRM) titled Regulated Navigation Area; Illinois River, Naplate, IL (90 FR 25183). There, we stated why we issued the NPRM and invited comments on our proposed regulatory action related to this area. During the comment period that ended July 16, 2025, we received one comment.

The Coast Guard is issuing this rule under the authority in 46 U.S.C. 70034. The purpose of this rulemaking is to ensure the protectiveness of the remedy for the Illinois River Operable Unit, as outlined in the 2008 EPA Record of Decision for the OTFG Site, by prohibiting anchoring or pushing a vessel onto the bank within the Regulated Navigation Area except as otherwise set forth herein. The Great Lakes District Commander has determined that the protection provided by this rule will also protect human health and the environment.

As noted above, we received one comment on our NPRM published June 16, 2025. As this comment was fully in support of the proposal as written, there are no changes in the regulatory text of this rule from the proposed rule in the NPRM.

This rule establishes a Regulated Navigation Area for all waters of the Illinois River, from surface to bottom, encompassed by a line connecting the following points beginning at 41°19′24.495″ N, 88°53′23.388″ W; thence to 41°19′22.5156″ N, 88°53′25.2198″ W; thence to 41°19′17.4684″ N, 88°53′17.4876″ W; thence to 41°19′17.259″ N, 88°53′15.3126″ W; thence to 41°19′21.9468″ N, 88°52′44.8206″ W; thence to 41°19′27.4404″ N, 88°52′33.9708″ W; thence to 41°19′32.3862″ N, 88°52′29.1534″ W; thence to 41°19′33.8088″ N, 88°52′31.8612″; and along the shore line back to the beginning point. These coordinates are based on World Geodetic System 1984 (WGS 84).

All vessels and persons are prohibited from anchoring, dredging, laying cable, dragging, seining, bottom fishing, conducting salvage operations, or any other activity which could potentially disturb the seabed in the designated area. Vessels may otherwise transit or navigate within the RNA. The prohibition described does not apply to vessels or persons engaged in activities associated with remediation efforts related to the Ottawa Township Flat Glass Superfund Alternative Site, provided that the Coast Guard Captain of the Port Lake Michigan (COTP) is given advance notice of those activities by EPA.

We developed this rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders.

The Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, as amended, requires Federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard received no comments from the Small Business Administration on this rulemaking. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities for the following reasons: vessel traffic will be able to transit or navigate within the RNA, so long as they do not engage in anchoring, dredging, laying cable, dragging, seining, bottom fishing, conducting salvage operations, or any other activity which could potentially disturb the seabed in the designated area. While such activities are prohibited within the RNA, ample alternative locations exist near the RNA to conduct them, thus ensuring that this rule will not have a significant impact on a substantial number of small entities.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule will affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please call or email the person listed in the FOR FURTHER INFORMATION CONTACT section.

Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.

This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the National Government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in Executive Order 13132.

Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.

We have analyzed this rule under Department of Homeland Security Directive 023-01, Rev. 1, associated implementing instructions, and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves all vessels conducting operations potentially disturbing contaminated seabed in the regulated area to include, but not limited to: anchoring, dragging, spudding, or dredging. Normally, such actions are categorically excluded from further review under paragraph L[60a] of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1. A Record of Environmental Consideration supporting this determination is available in the docket. For instructions on locating the docket, see the ADDRESSES section of this preamble.

For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:

The Coast Guard received notification that the USNS SALVOR will be conducting vessel salvage operations in the vicinity of Piti Channel, Apra Harbor. As part of the salvage, the USNS SALVOR will be relocating the M/V VOYAGER, under Dead Ship Tow, from its current grounded position to a designated ocean disposal site approximately 20 nautical miles Northwest of Guam. The Captain of the Port (COTP) Guam has determined that potential hazards associated with the salvage operation are a safety concern for anyone within 100 yards of the active tow.

Therefore, the COTP is issuing this rule under the authority in 46 U.S.C. 70034, which is needed to protect personnel, vessels, and the marine environment in the navigable waters within the safety zone.

The Coast Guard is issuing this rule without prior notice and comment. As is authorized by 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule because it is impracticable and contrary to the public interest. The Coast Guard was notified of this salvage operation on September 8, 2025, and we must establish this safety zone by September 15, 2025, to protect personnel, vessels, and the marine environment. Therefore, we have do not have enough time to solicit and respond to comments. Delaying the effective date for this safety zone to complete the NPRM process also would be contrary to the public interest as it would delay the safety measures vital to safe navigation.

For the same reasons, the Coast Guard finds that under 5 U.S.C. 553(d)(3), good cause exists for making this rule effective less than 30 days after publication in the Federal Register . Delaying the effective date for this rule is impracticable because prompt action is needed to respond to the potential safety hazards associated with the salvage operation.

This rule establishes a safety zone while the USNS SALVOR intermittently has the M/V VOYAGER under Dead-Ship tow during the Naval salvage operation occurring from September 15, 2025, through October 07, 2025. The safety zone will encompass all navigable waters within a 100-yard radius surrounding both vessels. During the periods when it is subject to enforcement, the duration of the zone will be announced via Broadcast Notice to Mariners and is intended to protect personnel, vessels, and the marine environment during hazardous portions of the salvage operation while continuing to facilitate normal port operations. No vessel or person will be permitted to enter the moving safety zone without obtaining permission from the COTP or their designated representative.

We developed this rule after considering numerous statutes and Executive orders related to rulemaking. Below we summarize our analyses based on a number of these statutes and Executive orders.

The regulatory flexibility analysis provisions of the Regulatory Flexibility Act of 1980, 5 U.S.C. 601-612, do not apply to rules that are not subject to notice and comment. Because the Coast Guard has, for good cause, waived the notice and comment requirement that would otherwise apply to this rulemaking, the Regulatory Flexibility Act's flexibility analysis provisions do not apply here.

Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), if this rule will affect your small business, organization, or governmental jurisdiction and you have questions, contact the person listed in the FOR FURTHER INFORMATION CONTACT section.

Small businesses may send comments to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards by calling 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.

This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).

We have analyzed this rule under Executive Order 13132, Federalism, and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in that Order.

Also, this rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.

As required by The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538), the Coast Guard certifies that this rule will not result in an annual expenditure of $100,000,000 or more (adjusted for inflation) by a State, local, or tribal government, in the aggregate, or by the private sector.

We have analyzed this rule under Department of Homeland Security Directive 023-01, Rev. 1, associated implementing instructions, and Environmental Planning COMDTINST 5090.1 (series), which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment.

This rule is a safety zone. It is categorically excluded from further review under paragraph L60(c) of Appendix A, Table 1 of DHS Instruction Manual 023-01-001-01, Rev. 1, because we must get the safety zone into effect before imminent salvage operations begin.

For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:

This is a summary of the Commission's Order on Reconsideration ( Order ), FCC 25-45, adopted August 4, 2025, and released August 6, 2025. The full text of this document is available by downloading the text from the Commission's website at: https://docs.fcc.gov/public/attachments/FCC-25-45A1.pdf. The full text of this document is available for public inspection and copying during regular business hours in the FCC Reference Center, 45 L Street NE, Washington, DC 20554. To request materials in accessible formats for people with disabilities (Braille, large print, electronic files, audio format), send an email to FCC504@fcc.gov or call the Consumer & Governmental Affairs Bureau at 202-418-0530 (voice). A Proposed Rule relating to 47 CFR part 4 is published elsewhere in this issue of the Federal Register .

The Regulatory Flexibility Act of 1980, as amended (RFA), requires that an agency prepare a regulatory flexibility analysis for notice-and-comment rulemaking proceedings, unless the agency certifies that “the rule will not, if promulgated, have a significant economic impact on a substantial number of small entities.” Accordingly, the Commission has prepared a Final Regulatory Flexibility Analysis (FRFA) and Initial Regulatory Flexibility Analysis (IRFA) concerning possible impact of the rule and policy changes contained in the Order on Reconsideration on small entities concerning possible impact of the rule and policy changes contained in the Order on Reconsideration on small entities. The FRFA is set forth in Appendix C.

The Commission has determined, and the Administrator of the Office of Information and Regulatory Affairs, Office of Management and Budget, concurs, that this rule is “non-major” under the Congressional Review Act, 5 U.S.C. 804(2). The Commission will send a copy of this Order on Reconsideration to Congress and the Government Accountability Office pursuant to 5 U.S.C. 801(a)(1)(A).

This Order on Reconsideration does not contain proposed information collections subject to the Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. 3501-3521. In addition, therefore, it does not contain any new or modified information collection burden for small business concerns with fewer than 25 employees, pursuant to the Small Business Paperwork Relief Act of 2002, 44 U.S.C. 3506(c)(4).

In this Order, we grant, in part, ATIS's Petition for Reconsideration and/or Clarification of the Second Report and Order. The Second Report and Order codifies the suspension of NORS reporting requirements when filers timely report outages in DIRS while DIRS is activated. We clarify that when any NORS filing is due prior to the first DIRS filing deadline, providers must submit that filing in NORS. Requirements to submit NORS filings with deadlines that occur after the deadline for the first DIRS filing deadline are waived so long as the outage is timely reported in DIRS. We otherwise deny the petition. Specifically, we decline ATIS's request to clarify that the waiver of NORS reporting during DIRS activations extends to 911 and 988 special facility notifications. We reaffirm that the final rules that the Commission adopted in the Second Report and Order regarding the waiver of NORS reporting during DIRS activations serve the public interest. We dispose of the other issues raised in ATIS's petition, concerning DIRS final reports and extending the NORS reporting waiver to DIRS-Lite activations, pursuant to § 1.429(b). These arguments were not raised in response to the 2021 Resilient Networks NPRM, and we do not believe that consideration of ATIS's arguments on these points is required in the public interest, as necessary for us to address an issue that was not raised during the proceeding for which reconsideration is sought. We nonetheless seek comment on these issues in the Third Further Notice to more fully consider alternatives in response to the points ATIS raises.

We clarify our outage reporting requirements for outages that occur in the same geographic area as a DIRS activation. In these circumstances, providers must file in NORS if the required filing will become due prior to the first DIRS filing deadline of the activation. Requirements to submit any NORS filings with deadlines that occur after the first DIRS filing deadline will be waived as long as the outages are timely reported in DIRS. If the first DIRS filing deadline occurs before the NORS notification is due, then the provider may file solely in DIRS. This waiver does not apply to outages occurring outside of the geographic area where DIRS is activated, nor does it apply to outages with notification deadlines that occur after DIRS is deactivated. All outage impacts that are not timely reported in DIRS must still be reported in NORS. We believe the clarity we provide today will serve the public interest by confirming reporting obligations in those limited circumstances when an outage occurs, in ATIS's phrasing, “just prior to” a DIRS activation. This clear demarcation defining when NORS reports must be filed for outages occurring “just prior” to a DIRS activation will remove any potential uncertainty among providers. We agree with ATIS that by providing greater certainty regarding how the NORS waiver is to be applied, this waiver will be more effective at reducing filing burdens during emergencies.

We deny ATIS's request to clarify that NORS filers be allowed to withdraw notifications or reports that are filed in NORS before the first DIRS filing deadline solely because DIRS has been activated in the area of the outage. ATIS suggests that without this clarification, the Commission may receive “duplicative outage reports for the same disaster.” We find that the benefit of maintaining the NORS report on file outweighs any burden of potentially receiving duplicative reports. Maintaining the NORS report on file allows the Commission to retain a record that the provider satisfied its obligation. Additionally, allowing withdrawals solely in response to a DIRS activation would not reduce any reporting burden to communications service providers, as the effort to create and submit a NORS report would have already been expended (and withdrawing a NORS report would arguably expend additional provider resources). Further, withdrawing a NORS report would deprive the Commission of potentially useful information that is not collected in DIRS, such as the outage start time. To be clear, we do not preclude communications service providers from withdrawing NORS reports if there are other reasons in addition to the activation of DIRS that support withdrawal ( e.g., the outage is determined not to meet the NORS reporting threshold). But absent some other reason justifying withdrawal in addition to a DIRS activation, we find that the public interest is best served by maintaining such NORS reports on file and therefore decline ATIS's request.

We decline ATIS's request to clarify that the NORS reporting waiver during DIRS activations applies to 911 and 988 special facility outage notification requirements because ATIS's request is both procedurally and substantively infirm. With respect to the procedural soundness of ATIS's request for clarification, we agree with APCO that ATIS's argument is procedurally barred because ATIS failed to present it to the Commission at the appropriate juncture. ATIS does not dispute that its comments and reply in response to the 2021 Resilient Networks NPRM failed to request that the Commission extend its proposed NORS waiver to include special facility notification requirements, but asserts that its argument is nonetheless timely because some special facility notification requirements stem from subsequent Commission orders on 911 and 988 reporting that post-date the 2021 Resilient Networks NPRM. While it is true that the Commission adopted additional 911 and 988 special facility outage notification obligations following issuance of the 2021 Resilient Networks NPRM, substantially similar 911 special facility outage notification rules have been codified in the Commission's rules for several years. Since 2004, originating providers of cable communications, wireless, satellite communications, and wireless service have been required to notify a 911 special facility “as soon as possible” whenever an outage potentially affects that 911 special facility. In 2013, the Commission expanded this 911 special facility notification requirement to “covered 911 service providers” and imposed more specific requirements on the timing and content of those notifications. Thus, although the Commission took further incremental steps to refine the timing for delivery of those notifications in the November 2022 911 Outage Notification Order and expanded their application to the 988 context in the July 2023 988 Outage Notification Order, the special facility notification requirements were a longstanding component of the Commission's rules when ATIS submitted its comments and reply in response to the 2021 Resilient Networks NPRM. ATIS therefore cannot satisfy the requirement under the rules of establishing that it did not know, and could not have ascertained with ordinary diligence, its argument about waiving 911 and 988 special facility notification requirements when DIRS is activated until it filed its petition in May 2024. We therefore decline to consider this argument on procedural grounds.

On alternative and independent grounds, we deny ATIS's clarification request because it raises public interest concerns that cannot be overcome by the purported benefits that ATIS claims. To justify its request, ATIS asserts that this clarification “will better satisfy the purpose of the waiver” and “reduce the burden on providers during major disasters. . . .” APCO cites “substantive concerns” with ATIS's request, noting that the special facility outage notifications provide “a degree of situational awareness that is qualitatively different from the information available in DIRS[]” and “are much more likely to enable PSAP/ECC personnel to recognize the impacts on their community” and take prompt responsive action. Contrary to ATIS and CTIA's contentions that these notifications are unnecessary, DIRS daily reports are not an adequate substitute for the outage notifications to 911 and 988 special facilities required by our rules. ATIS is incorrect when it asserts that PSAPs can access DIRS data directly pursuant to the Commission's information sharing rules with state and federal governments under section 4.2. PSAPs generally would not qualify for such access because they are not state agencies. While we expect that PSAPs would derive value from the aggregated DIRS daily reports made publicly available during disaster events, outage notifications made directly to PSAPs are more timely than those provided through DIRS daily reports and provide more specific information including the identity of the service provider experiencing the outage. Moreover, while we recognize that there is some burden in preparing and submitting these notifications, we believe that burden is outweighed by the situational awareness these notifications will afford 911 and 988 special facilities in times of disaster when emergency services are needed most. For example, when 911 special facilities receive notification of an outage within 30 minutes, as required under the notification rules, they are able to timely publicize alternative methods for contacting emergency services. In contrast, DIRS reports must be submitted only once per day, and the information they contain could therefore be less up-to-date. To foster continued realization of these important public safety benefits, we deny ATIS's request for clarification and confirm that providers must continue to comply with applicable 911 and 988 outage notification requirements during DIRS activations.

As required by the Regulatory Flexibility Act of 1980, as amended (RFA), the Commission incorporated an Initial Regulatory Flexibility Analysis (IRFA) in the 2021 Resilient Networks Notice of Proposed Rulemaking ( NPRM ), released in October 2021, and in the Second Report and Order & Further Notice of Proposed Rulemaking ( Second Report and Order & FNPRM ), released in January 2024. The Commission sought written public comment on the proposals in the 2021 Resilient Networks NPRM and the Second Report and Order & FNPRM, including comment on the IRFAs. No comments were filed addressing the IRFAs. This Final Regulatory Flexibility Analysis (FRFA) conforms to the RFA, and it (or summaries thereof) will be published in the Federal Register .

In today's Order on Reconsideration ( Order ), the Commission addresses the Alliance for Telecommunications Industry Solutions' (ATIS's) petition for reconsideration of the Second Report and Order & FNPRM clarifying how the waiver of Network Outage Reporting System (NORS) reports will apply during Disaster Information Reporting System (DIRS) activations when outages occur in the same geographic area as a DIRS activation, to outages for which notifications or initial reports have already been filed in NORS, and to the Commission's Public Safety Answering Points (PSAPs) and 988 Suicide & Crisis Lifeline notification requirements. We clarify that when any NORS filing is due prior to the first DIRS filing deadline, providers must submit that filing in NORS. Requirements to submit NORS filings with deadlines that occur after the deadline for the first DIRS filing deadline are waived so long as the outage is timely reported in DIRS. The Commission believes this clarity will serve the public interest by providing certainty to service providers regarding their outage reporting obligations.

We decline to extend the NORS reporting waiver to the Commission's PSAP and 988 Suicide & Crisis Lifeline notification requirements for procedural and substantive reasons. We find this request for clarification is beyond the scope of the Second Report and Order & FNPRM because neither the 2021 Resilient Networks NPRM nor the Second Report and Order & FNPRM contemplated waiving these notifications, and because granting this relief would be contrary to the public interest as it would deprive public safety stakeholders of timely information about service outages.

In the Third Further Notice accompanying the Order on Reconsideration, the Commission seeks comment on the remaining issues raised in the underlying petition for reconsideration. Specifically, we seek comment on whether the NORS filing waiver should apply to DIRS-Lite activations and whether DIRS final reporting obligations should be eliminated. These issues will be addressed based on the record from the Third Further Notice.

This action is authorized pursuant to sections 1, 4, 201, 214, 218, 251, 301, 303(b), 303(g), 303(j), 303(r), 307, 309, 316, 332, and 403, of the Communications Act of 1934, as amended, 47 U.S.C. 151, 154, 201, 214, 218, 251, 301, 303(b), 303(g), 303(j), 303(r), 307, 309, 316, 332, 403, sections 2, 3(b), and 6-7 of the Wireless Communications and Public Safety Act of 1999, 47 U.S.C. 615 note, 615, 615a-1, 615b, and section 1.429 of the Commission's rules, 47 CFR 1.429.

The RFA directs agencies to provide a description of and, where feasible, an estimate of the number of small entities that may be affected by the proposed rules, if adopted. The RFA generally defines the term “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. A “small business concern” is one which: (1) is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the SBA.

Small Businesses, Small Organizations, Small Governmental Jurisdictions. Our actions, over time, may affect small entities that are not easily categorized at present. We therefore describe three broad groups of small entities that could be directly affected by our actions. First, while there are industry specific size standards for small businesses that are used in the regulatory flexibility analysis, in general, a small business is an independent business having fewer than 500 employees. These types of small businesses represent 99.9% of all businesses in the United States, which translates to 34.75 million businesses. Next, “small organizations” are not-for-profit enterprises that are independently owned and operated and not dominant their field. While we do not have data regarding the number of non-profits that meet that criteria, over 99 percent of nonprofits have fewer than 500 employees. Finally, “small governmental jurisdictions” are defined as cities, counties, towns, townships, villages, school districts, or special districts with populations of less than fifty thousand. Based on the 2022 U.S. Census of Governments data, we estimate that at least 48,724 out of 90,835 local government jurisdictions have a population of less than 50,000.

The actions taken in the Order will apply to a substantial number of small entities in the following industries: All Other Telecommunications, Media Streaming Distribution Services, Social Networks, and Other Media Networks and Content Providers; Radio Stations; Satellite Telecommunications; Telecommunications Resellers; Television Broadcasting; Wired Telecommunications Carriers; and Wireless Telecommunications Carriers (except Satellite). Affected entities within these identified industries include: Competitive Local Exchange Carriers; Incumbent Local Exchange Carriers; Local Exchange Carriers; Wired Telecommunications Carriers; Interexchange Carriers; Operator Service Providers; Local Resellers; Toll Resellers; Telecommunications Resellers; Wireless Telecommunications Carriers (except Satellite); Specialized Mobile Radio Licenses; and Wireless Telephony.

The requirements in the Order will not impose new or modified reporting, recordkeeping and/or other compliance obligations on small entities. The Order clarifies the timing of outage reports and situations in which NORS reporting is waived. Providing a clear demarcation defining when NORS reports must be filed for outages occurring “just prior” to a DIRS activation will remove any potential filing requirements uncertainty for small and other providers. Further, the certainty provided by the Commission's clarification of how the NORS waiver is to be applied should reduce filing burdens during emergencies for small and other providers. The Order will not impose additional obligations or expenditure of resources on small businesses, and our clarifications should not require small entities to hire professionals.

The Chief Counsel for Advocacy of the Small Business Administration did not file any comments in response to the proposed rules in this proceeding.

The Commission in the Order considered and denied ATIS's request for clarification that NORS filers be allowed to withdraw notifications or reports that are filed in NORS before the first DIRS filing deadline solely because DIRS has been activated in the area of the outage. We also considered and denied ATIS's request to clarify that the NORS reporting waiver applies to 911 and 988 special facility outage notification requirements, and confirm that small and other providers must continue to comply with applicable 911 and 988 outage notification requirements during DIRS activations.

Accordingly, it is ordered that the Order on Reconsideration in PS Docket Nos. 21-346 and 15-80 and ET Docket No. 04-35 is adopted and the Alliance for Telecommunications Industry Solutions' Petition for Clarification and/or Reconsideration is granted as discussed herein and otherwise denied.

It is further ordered that the Office of Managing Director, Performance Program Management, shall send a copy of this Order on Reconsideration in a report to be sent to Congress and the Government Accountability Office pursuant to the Congressional Review Act, 5 U.S.C. 801(a)(1)(A).

It is further ordered that this Order on Reconsideration shall be effective upon publication in the Federal Register .

For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR part 4 as follows:

This is a summary of the Commission's Fourth Report and Order in WC Docket No. 18-336, FCC 25-42, adopted on July 24, 2025 and released on July 25, 2025. The full text of the document is available on the Commission's website at https://docs.fcc.gov/public/attachments/FCC-25-42A1.pdf. To request materials in accessible formats for people with disabilities ( e.g., braille, large print, electronic files, audio format, etc.), send an email to FCC504@fcc.gov or call the Consumer & Governmental Affairs bureau at (202) 418-0530 (voice).

1. In this Fourth Report and Order, we take further steps to facilitate access to the 988 Lifeline's critical local support services by requiring covered text providers to develop and implement georouting solutions for 988 text messages. First, based on a review of the record in the Implementation of the National Suicide Hotline Act of 2018, Third Further notice of Proposed Rulemaking ( 988 Georouting Third Further Notice ), 89 FR 91636 (November 20, 2024) we find that establishing georouting for 988 text messages is essential to ensure that text users are routed to geographically appropriate crisis centers and will provide important benefits to Lifeline users. Next, we define “georouting data” and other relevant terms for purposes of our rules, and adopt a two-part requirement to delineate the scope of covered text providers' obligations. Finally, in order to facilitate ongoing efforts to develop 988 text georouting capabilities, we adopt an implementation time frame of 18 months for nationwide providers, and 36 months for non-nationwide providers.

2. Georouting refers to the technical solutions for directing calls based on a geographic location of the originating call without transmitting information about the handset's precise location. Georouting is distinct from geolocation, which involves the transmission of precise location information ( e.g., street address) often used to dispatch emergencies services. Today, in the absence of georouting, providers route 988 text messages to the Lifeline's centralized system. After a text message reaches 988, the Lifeline Administrator is responsible for routing the text message to an individual crisis center and currently does so based on the area code associated with the text user's wireless device. This inhibits the Lifeline's ability to provide access to more localized services when a text user's area code does not correspond to their geographic location.

Based on our review of the record, we find that requiring providers to implement a georouting solution for 988 text messages is essential to improving access to the Lifeline's critical mental health crisis and suicide prevention services. The record overwhelmingly supports the conclusion that georouting for 988 text messages will help connect individuals with more geographically appropriate crisis centers that should have a better understanding of available local resources and unique community stressors. As Reimagine Crisis Response explains, local crisis centers are better positioned to connect individuals “with local mental health care, resources, and support that can help . . . beyond the initial crisis.” According to the current Lifeline Administrator, many individuals that reach out to 988 need resources for follow-up care, including referrals to mental health resources within their current local communities. Several commenters agree that georouting for 988 text messages will improve access to referral and follow-up services that may reduce the risk of future mental health and suicidal crises.

Mental health and public safety commenters emphasize that georouting for 988 text messages will improve access for youth and young adults. Indeed, in response to the Implementation of the National Suicide Hotline Act of 2018, Second Further Notice of Proposed Rulemaking ( 988 Georouting Second Further Notice ), 89 FR 46340 (May 29, 2024), we received over 450 comments from American Foundation for Suicide Prevention (AFSP) advocates expressing support for requiring georouting for 988 text messages, all emphasizing the significant benefits for children and young adults. As the current Lifeline Administrator explains, georouting for 988 text messages will “help connect young people with counselors who may have a deeper insight into the unique exacerbators within their local communities.” AFSP further notes that georouting is particularly important for “college-aged young adults [who] may be attending schools and universities . . . in areas that do not correspond with their cell phones' area codes.”

3. Many commenters also agree that georouting for 988 text messages will enhance access to local resources and follow-up care services for individuals with disabilities, including individuals who are deaf, hard of hearing, or have a speech disability. As the Accessibility Organizations explain, text messaging is “a preferred or necessary mode of communication, due to barriers to making voice calls,” for many individuals with disabilities. The record further indicates that georouting for 988 text messages will provide benefits for other disproportionately impacted populations, including older men, rural communities, and individuals with low incomes or safety concerns.

4. We also find georouting for 988 text messages will help ensure that Americans in crisis have access to help, regardless of whether they call or text the Lifeline. As the National Alliance on Mental Illness (NAMI) asserts, implementing georouting for voice calls but not for text messages may cause confusion and undermine trust in the 988 Lifeline. Additionally, as several commenters emphasize, achieving routing parity with voice calls will help to minimize inconsistencies in service quality that might otherwise discourage individuals from seeking help, further increasing trust in the 988 Lifeline.

5. As proposed in the 988 Georouting Third Further Notice, for the purposes of the rules we adopt today, we incorporate the definitions of the terms “covered 988 text message” and “covered text provider,” as adopted in the Implementation of the National Suicide Hotline Act of 2018, Second Report and Order ( Text-to-988 Second Report and Order ), 89 FR 46340 (May 29, 2024). We similarly rely on the definitions of “Commercial Mobile Radio Service (CMRS)” and “georouting data” adopted by the Commission in the Implementation of the National Suicide Hotline Act of 2018, Third Report and Order ( 988 Georouting Third Report and Order ), 89 FR 91636 (November 20, 2024). To preserve consistency across the requirements for georouting 988 calls and georouting text-to-988, we likewise use the definition of “Lifeline Administrator” adopted by the 988 Georouting Third Report and Order. No commenter opposed this approach. Although supportive of the Commission's existing definitions for these terms, the Accessibility Organizations urge the Commission to account for the accessibility needs of individuals who are deaf or hard of hearing, or have a speech or other disability that impacts communication in crafting rules for 988 text georouting. We find that georouting text-to-988 will have a significant impact on connecting individuals, including those who are deaf or hard of hearing, or have a speech or other disability that impacts communication, to local resources and improve the accessibility of lifesaving resources. We therefore adopt our proposal in the Further Notice to incorporate the definitions adopted by the Commission in the Text-to-988 Second Report and Order and 988 Georouting Third Report and Order with our 988 text georouting rules. We find that relying on the Commission's existing definitions will ensure technological neutrality and regulatory consistency across our rules with respect to 988 georouting.

6. Covered 988 Text Message. We apply our 988 text georouting requirements to “covered 988 text messages” as that term is defined in the Text-to-988 Second Report and Order (defining a “[c]overed 988 text message” as “a 988 text message in SMS format and any other format that the Wireline Competition Bureau has determined must be supported by covered text providers”), thereby limiting our georouting rules to “988 text messages” that are in an Short Message Service (SMS) format. The record overwhelmingly supports limiting our requirements to SMS messages at this stage, in order to conform with the existing technical capabilities of the Lifeline, which can currently only receive SMS texts. While Intrado Life & Safety (Intrado) argues that the rules should obligate georouting of the text portion of Multimedia Message Service (MMS), we find that limiting our georouting rules to messages sent in SMS format will enable the 988 Lifeline to leverage current technology while developing georouting solutions that could adapt to messaging protocols such as MMS and Rich Communications Service (RCS) if necessary in the future. In this Fourth Report and Order, we use “Intrado” to refer to the entity previously referred to in this proceeding as “Intrado Life & Safety.” For a full discussion of the Intrado organization, see 988 Georouting Second Further Notice. In the Text-to-988 Second Report and Order, the Commission delegated to the Bureau the authority to make future determinations to require covered text providers to support additional text formats, in the event that the Lifeline developed the capability to receive such messages. In connection with this delegated authority, the Commission directed the Bureau to consult with the Substance Abuse and Mental Health Services Administration (SAMHSA) and the U.S. Department of Veterans Affairs (VA) on whether any text formats other than SMS are compatible with the 988 Lifeline. To the extent that SAMHSA is reorganized, dissolved, or its responsibilities are transferred, all references to “SAMHSA” in this Order shall be interpreted to include any successor agency or entity that assumes authority for oversight of the 988 Lifeline, grants administration, or coordination on technical implementation of 988 services. We further direct the Bureau to determine through its ongoing consultation process with SAMHSA and the VA whether the 988 Lifeline can accept georouting data with any newly identified text formats. In the event that the 988 Lifeline becomes capable of accepting any additional text formats, the Bureau shall seek comment on whether to require providers to transmit georouting data for such text formats in its annual public notice. We emphasize that this delegated authority is limited in scope. The Bureau may incorporate additional text formats into the Commission's rules if, and only if, the Lifeline becomes able to receive such messages, in which case it must provide notice and an opportunity for comment before adopting any new requirements. The Bureau is also required to “identify all implementation deadlines with certainty ( i.e., by a specified calendar date)” and in doing so, must “assess factors such as technical and financial challenges with respect to implementation, the status of the Lifeline, and the public interest.”

7. Covered Text Providers. We apply our 988 text georouting requirements to “Covered Text Providers,” as defined in the Text-to-988 Second Report and Order. Covered text providers include “all [Commercial Mobile Radio Service (CMRS)] providers, as well as all providers of interconnected text messaging services that enable consumers to send text messages to and receive text messages from all or substantially all text-capable U.S. telephone numbers, including through the use of applications downloaded or otherwise installed on mobile phones.” As noted above, our text georouting requirements are limited to 988 text messages sent in SMS format and therefore do not apply to over-the-top providers. An over-the-top provider refers to services accessed through broadband connections obtained by the consumer, or through public or private Wi-Fi connections that may not access cellular networks.

8. Georouting Data. For the purposes of these rules, we define “georouting data” to mean location data generated from cell-based location technology that is aggregated to a level that will not identify the location of the cell site or base station receiving the 988 text message or otherwise identify the precise location of the handset. Vibrant initially raised concern that adopting this definition of georouting data for text-to-988 was too broad, however, it later indicated agreement with the proposed approach and “recommend[ed] that any proposed georouting solution should utilize cell tower data, obtained from a carrier, to determine the geographic origin of 988 Lifeline text messages.” We note that this definition, which is consistent with that adopted in the 988 Georouting Third Report and Order, precludes the transmission of more precise location data. The definition of georouting data adopted in this Fourth Report and Order is the same as that used for our georouting rules for 988 voice calls, apart from its application to “covered 988 text message[s],” as opposed to “988 call[s].” The 988 Georouting Third Report and Order found that this approach would “best identify a caller's location to enable routing of 988 calls to geographically appropriate crisis centers, while maintaining the privacy interests of callers” and “provid[ing] nationwide providers flexibility to deploy current georouting solutions developed with the SAMHSA and the Lifeline Administrator.” As explained below, we find that these considerations apply equally with respect to our text-to-988 georouting rules. Some commenters assert that georouting based on the location of the tower in which the contact was initiated does not provide sufficient granularity to dispatch emergency services. As discussed in greater detail below, we find that georouting based on aggregated, cell-based location information best balances the benefits of location-based routing with the privacy interests of 988 users.

9. Commercial Mobile Radio Service. We also adopt our proposal to revise § 52.201(b) of the Commission's rules to read “Commercial Mobile Radio Service” instead of “Commercial Mobile Radio Services.” This correction is necessary to align the rule with the Commission's intent, as stated in the Text-to-988 Second Report and Order, to adopt the well-established text-to-911 definition of “covered text provider.” We note that no commenter questioned our proposal.

10. In this Fourth Report and Order, we adopt general requirements designed to enhance the Lifeline's ability to connect text users to geographically appropriate crisis centers, while safeguarding the critical privacy interests of individuals seeking life-saving assistance. Specifically, we require covered text providers to: (1) develop the capability to transmit georouting data in a format that is compatible with the Lifeline's system to allow routing of covered 988 text messages by the Lifeline Administrator to the appropriate crisis center based on the geographic area where the handset is located at the time the text message is initiated; and (2) provide such georouting data for 988 text messages, when available, to the Lifeline Administrator. In adopting these rules, we support voluntary efforts to identify and develop industry-based georouting solutions for 988 text messages by providing a flexible, technology-neutral framework for our requirements.

11. Consistent with the 988 Georouting Third Further Notice, we first require covered text providers to develop the capability to transmit georouting data for 988 text messages in a format that is compatible with the Lifeline's routing platform. We find that this requirement is necessary to ensure that 988 text users receive the benefits of georouting, regardless of the covered text providers' network configurations. As with the other requirements we adopt today, we give covered text providers the flexibility to use technically feasible options that are best suited to their networks, provided that the georouting solutions are compatible with the Lifeline's system. We make clear that our rules create an ongoing obligation for covered text providers to ensure that georouting data remains compatible with the Lifeline's system, and we encourage stakeholders to collaborate in developing and testing such solutions.

12. The record strongly supports requiring any text-to-988 georouting solutions to be compatible with the Lifeline's system and infrastructure. For example, CTIA argues that we should “continue to rely on technologies that are consistent with covered text providers' and the Lifeline's system[] to facilitate prompt and seamless implementation of new capabilities, including georouting.” The Accessibility Organizations add that this approach “ensures uniformity, reducing the chances of technical mismatches or delays in delivering critical support.” We therefore agree with the Lifeline Administrator and T-Mobile that “the best georouting solution will be one that can integrate with the 988 Lifeline's current routing network.” And, as we have explained, we are adopting a rule that does not mandate geolocation reporting and that defines georouting data as“[l]ocation data generated from cell-based location technology that is aggregated to a level that will not identify the location of the cell site or base station receiving the covered 988 text message or otherwise identify the precise location of the handset.”

13. We recognize that our federal partners may choose to expand the Lifeline's system to support a broader range of compatible text-to-988 georouting solutions. Accordingly, and similar to the Commission's approach for voice-to-988 georouting, we direct the Bureau to routinely consult with SAMHSA regarding the format of text-to-988 georouting data that is compatible with the 988 Lifeline's system. We further direct the Bureau to monitor the development of text-to-988 georouting solutions and, if necessary, propose and seek comment on implementation parameters for covered text providers for any compatible text-to-988 georouting data that is substantially modified from the requirements adopted herein.

14. Aggregation of Cell-Based Location Data. As numerous commenters observe, the privacy interests of 988 text users are paramount. For this reason, we require covered text providers to aggregate location data generated from cell-based technology to a level that will not identify the location of the cell site or base station receiving the 988 text or otherwise identify the precise location of the handset. The rules we adopt today protect privacy interests by prohibiting the transmission of more granular cell site data or the precise location of the text user, while allowing covered text providers flexibility in implementing technical solutions that use different granularity of data, such as wire center or Federal Information Processing Series (FIPS) code geographic boundaries. As with the Commission's approach for voice-to-988 georouting, in adopting this requirement, we carefully balance the importance of maintaining user privacy with the need to expeditiously improve the routing of text messages to the Lifeline.

15. The 988 Georouting Third Further Notice and 988 Text Georouting Privacy Notice sought comment to determine the necessary granularity of location data for text-to-988 georouting that protects the privacy expectations of text users, while still facilitating access to more localized services. In response, commenters generally argued that covered text providers need flexibility to develop and implement text-to-988 georouting solutions. To that end, rather than a prescriptive rule, we establish a general requirement that allows covered text providers flexibility to use technically feasible methods that are best suited to their networks to aggregate location data.

16. Based on our review of the record, we find that aggregating location data to county-level or wire-center boundaries is sufficiently general to protect text users' privacy while improving the routing of 988 text messages. The record indicates that the industry-based text georouting solution currently under development by nationwide wireless providers, the current Lifeline Administrator, and its vendor utilizes county-level FIPS code boundaries based on cell tower information and does not introduce precise location information into the 988 data flow. The Federal Information Processing Series (FIPS) codes are maintained and assigned by the Census Bureau to identify geographic areas. In its comments, the Lifeline Administrator states that the “solutions under consideration will use county-level data,” which “minimizes user-specific data to simply connect a help seeker to the nearest crisis contact center based on cell phone tower data.” We anticipate that our broad definition of “georouting data” will give covered text providers flexibility to implement technical solutions that use different granularity of data, such as wire center or FIPS code boundaries provided that such data does not reveal the precise location of the handset.

17. We disagree with the Boulder Regional Emergency Telephone Service Authority's (BRETSA) contention that more precise location information should be transmitted with 988 text messages. The record reflects significant support for georouting solutions that provide geographic routing information to the Lifeline without identifying a text user's precise location. We are also persuaded by commenters that 988 text users have unique privacy expectations as compared to 911 users, and find that any text-to-988 georouting solution must maintain text users' confidence that their precise location information will remain confidential when communicating with the Lifeline. Additionally, as discussed below, we decline to take specific action at this time to extend text-to-988 georouting requirements to the Lifeline's specialized service lines. We believe that this approach should alleviate the concern raised by the Electronic Privacy Information Center and Wildflower Alliance (EPIC-WA) that text users contacting the Lifeline's specialized service lines may be at a greater risk of being personally identified. While EPIC-WA provides a cautionary example of a texter in a small county “contacting a hotline focused on LGBTQ+ specific needs,” we note that, as of July 17, 2025, the 988 Lifeline “no longer silo[s] LGB+ youth services” through a “Press 3 option.”

18. Although we agree with the Conservative Political Action Conference Foundation's Center for Regulatory Freedom (CPAC) that maintaining the privacy of 988 callers and text users has been integral to the Lifeline's ability to serve as a “safe and dependable resource,” the requirements we adopt today will not obligate covered text providers to engage in “approximate geolocation reporting” or undermine Americans' trust in the integrity of the Lifeline. The rules we adopt today do not require covered text providers to transmit more precise geolocation data with 988 text messages, but rather aggregated location data, such as county-level information, that maintains text users' privacy by not identifying the precise location of the text users' handset.

19. We also disagree with those commenters that argue georouting data is not sufficiently granular to improve the routing of 988 text messages. While some commenters identify alternatives to georouting that may connect text users with local resources, we find that generating aggregated location information using cell-based technology will significantly improve the routing of 988 text messages and help connect text users to local resources in a timely manner while protecting user privacy. We disagree with BRETSA's inference that the benefits of improved routing are limited to instances in which individuals require emergency services intervention. As discussed above, georouting provides numerous benefits to individuals contacting 988, including those that do not require dispatch of emergency services. Likewise, we acknowledge CPAC's contention that geolocation could alleviate routing errors more effectively than georouting data, as well as its concerns about “further regulations aimed at correcting misrouting.” As CPAC states, however, sharing a 988 text user's precise location data raises significant privacy concerns. We agree, and therefore the definition of georouting data we adopt today precludes the transmission of more precise location data for 988 text messages.

20. We next adopt the Commission's proposal to require covered text providers to provide georouting data, when available, to the Lifeline Administrator, sufficient to allow routing of the message to the appropriate crisis center based on the geographic area where the handset is located at the time the covered 988 text message is initiated. As discussed below, we find that this approach strikes the right balance between ensuring that covered text providers support georouting for 988 text messages and allowing sufficient flexibility to develop and implement solutions that maximize their network capabilities.

21. Technical Considerations. To address technical limitations raised by the record, we require covered text providers to provide georouting data for 988 text messages to the Lifeline Administrator only when such data is available. We agree with CTIA and Intrado that limiting this requirement to providing georouting data “when available” is necessary to account for technical challenges and to enable covered text providers to optimize their current technology and networks. For instance, several commenters raise concerns about the technical feasibility of transmitting georouting data with text messages originated when a text user is roaming. While we acknowledge the public benefits of supporting georouting for all 988 text messages, we believe that limiting the requirement to providing georouting data “when available” strikes the appropriate balance between facilitating access to the Lifeline's resources and allowing providers the flexibility to address technical challenges.

22. The record indicates that, in the event that georouting data is unavailable, the Lifeline will route text messages based on the area code of the user's device. We agree with CX360 that, while “area code-based routing is imperfect,” this “alternative routing” process will help ensure that text users receive assistance even if the closest crisis center cannot be identified or reached. We believe that the Lifeline's default routing mechanism also alleviates record concern about incorporating “fallback mechanisms or alternative data sources” in our definition of georouting data. Additionally, we find that this approach provides parity with the Commission's rules for voice-to-988 georouting, which helps minimize confusion for both providers and individuals texting the 988 Lifeline. We also believe that this approach alleviates record concern about scenarios where covered text providers are incapable of providing georouting data.

23. Supporting Industry Efforts To Implement Text-to-988 Georouting. The rules we adopt today provide a flexible, technology-neutral framework that enables covered text providers to make industry-based determinations on implementing georouting solutions for 988 text messages. The record reflects that nationwide wireless providers, the current Lifeline Administrator, and its vendors are actively collaborating to develop georouting solutions for 988 text messages. As the Lifeline Administrator notes, this process will help “identify the necessary routing requirements for text messaging and explore solutions that protect the privacy of help-seekers.” And, as CTIA observes, aligning our requirements with industry-based solutions developed by stakeholders and the Lifeline Administrator is integral to the successful, timely implementation and ongoing improvement of the 988 Lifeline.

24. We find that a flexible approach to 988 text georouting is essential to support further innovation, as urged by many commenters in this proceeding. As several commenters observe, allowing providers flexibility to use technically feasible options that are compatible with the Lifeline's system is “appropriate, particularly given the ongoing technological development in this area.” The Competitive Carriers Association (CCA) adds that a technology-neutral framework “offers providers the flexibility to adopt the solutions that work best for their networks and promote[s] the improvement of those solutions over time.” We also share concerns that setting prescriptive requirements may compel providers to rely on underdeveloped solutions and potentially discourage further innovation to improve georouting for 988 text messages. To further facilitate efforts to make an industry-based determination, as discussed below, we provide a longer compliance period for both nationwide and non-nationwide providers than proposed in the 988 Georouting Third Further Notice. As such, we decline at this time to adopt more prescriptive requirements for how covered text providers must develop the capability and provide georouting data to the Lifeline.

25. We also agree with CCA that allowing “robust industry-led development of a standardized and scalable approach to georouting data for text messages” will better serve non-nationwide providers. The compliance deadlines we adopt below provide ample time for both nationwide and non-nationwide providers to implement and develop a georouting solution for 988 text messages, thereby minimizing compliance burdens. We strongly encourage non-nationwide covered text providers to collaborate with SAMHSA and the Lifeline Administrator in developing and testing georouting solutions for 988 text messages.

26. We conclude, however, that purely voluntary implementation undermines our goal of ensuring that the clear public benefits of georouting for 988 text messages are realized in a timely manner. For example, some wireless providers and industry commenters argue that text-to-988 georouting requirements are unnecessary at this time because national systems, rather than local crisis centers, handle most 988 text messages due to infrastructure limitations. We disagree. The record demonstrates that a significant number of local crisis centers are currently able to receive texts to 988. Moreover, the Lifeline Administrator indicates that this number is likely to grow in the future as more local crisis centers add text-to-988 capability. In any event, text-to-988 capability does not need to be universally available among the Lifeline's more than 200 local crisis centers in order to realize the significant benefits of georouting for 988 text messages, including improved access to local resources and counselors who may better understand unique community stressors. Notably, the current Lifeline Administrator does not dispute the need for us to adopt an affirmative requirement at this time. We therefore find that the benefits of georouting 988 text messages to those local crisis centers that are capable of receiving such messages easily support the commonsense, non-prescriptive requirements we adopt today.

27. We also decline to adopt the Rural Wireless Association's (RWA) suggestion to allow small rural non-nationwide providers to implement georouting solutions for 988 text messages on a voluntary basis. While we acknowledge that non-nationwide providers may face operational limitations when implementing georouting solutions for 988 text messages, we offer flexibility and additional compliance time to non-nationwide providers to minimize such burdens. Additionally, several commenters emphasize the importance of implementing georouting solutions for 988 text messages to improve access to the Lifeline's critical intervention services for rural Americans. We find the benefits of ensuring that all Americans have improved access to the Lifeline's lifesaving resources support applying our requirements to all covered text providers, including small rural providers. Our approach also promotes parity between 988 calls and texts, ensuring consistent and predictable level of service across communication modes while reducing potential confusion for individuals in distress.

28. We are unpersuaded by CTIA's argument that we should not extend georouting requirements to 988 text messages based on the Commission's actions in the 911 LBR Report and Order. In the 911 LBR Report and Order, the Commission declined to extend location-based routing (LBR) requirements to 911 SMS text messages, both because the industry had not yet developed standards for implementing location-based routing on SMS networks and to avoid requiring providers to retrofit legacy SMS networks. The Commission also noted that a number of Public Safety Answering Points (PSAPs) were incapable of receiving texts and that the volume of 911 text messages was far smaller than the volume of 911 voice calls. Although the record in this proceeding indicates that georouting solutions for 988 text messages may require some network and infrastructure changes, it does not raise the same concerns found in the context of 911 location-based routing about extensively retrofitting legacy SMS networks. The industry-based text-to-988 georouting solution endorsed by CX360 also supports the conclusion that industry stakeholders have already developed some standards for implementing text-to-988 georouting solutions. Further, georouting solutions for 988 text messages and location-based routing for 911 require different granularity of location data, and different entities perform the routing functions. Specifically, 911 location-based routing uses precise location data on the user's device to route 911 calls to the appropriate destination, whereas georouting solutions for 988 text messages use less granular aggregated location data, such as county-level FIPS codes or wire center boundaries. Moreover, in the context of 911, providers determine the routing destination based on the precise location information of a device, whereas the Lifeline Administrator retains responsibility for routing 988 text messages to individual crisis centers using the georouting data provided by the covered text providers. We therefore find that the technical differences between the routing methodologies and the record received in this proceeding distinguish 911 location-based routing requirements from georouting for 988 text messages.

29. We also disagree with those commenters that argue it is premature for the Commission to consider adopting text-to-988 georouting requirements. We believe that enabling georouting for 988 text messages to improve service for text users should not be unduly delayed, and that the Commission's affirmative and timely decision to require implementation (with flexible, technology-neutral parameters) will minimize confusion for both providers and individuals texting 988. Adopting rules will also provide clarity and regulatory certainty for covered text providers, encouraging progress in developing and implementing text-to-988 georouting solutions. Given the clear public interest benefits of supporting georouting for 988 text messages, we find that deployment and implementation of georouting solutions for 988 text messages should not be optional.

30. Technological Feasibility. We find that implementing georouting for 988 text messages is technologically feasible for nationwide and non-nationwide covered text providers. In the 988 Georouting Third Further Notice, the Commission sought comment on technical challenges that may arise in providing georouting data with covered 988 text messages, noting that there was disagreement in the record regarding the difficulty of implementing text-to-988 georouting solutions. While we recognize that there are technical differences between georouting solutions for 988 calls and text messages, the record indicates that at least one technically feasible approach exists today for text-to-988 georouting. Therefore, although the work to develop these solutions is ongoing, we find that deploying georouting solutions for 988 text messages is feasible for both nationwide and non-nationwide covered text providers within the compliance time frames we adopt in this Fourth Report and Order.

31. As discussed above, the nationwide wireless providers, the current Lifeline Administrator, and other industry stakeholders are actively collaborating to develop an industry-based georouting solution for 988 text messages that maintains text users' privacy. For instance, under the approach endorsed by CX360, covered text providers route covered text messages to the Lifeline as required under the Commission's existing rules without georouting data. The Lifeline's interactive voice response (IVR) system—which allows 988 callers and text-users to select specialized service lines, such as the Veterans Crisis Line—requests georouting data from the providers via a “secure, industry-standard application programming interface” only when the 988 text user does not request specialized services. To protect privacy, the covered text providers aggregate location data using county-level FIPS code boundaries, which is similar to the aggregation process used by some wireless providers for voice-to-988 georouting solutions. The record indicates that nationwide providers are already offering and supporting the use of network application programming interfaces. Moreover, while the “discovery phase” to develop an industry-based georouting solution is ongoing, the Lifeline Administrator “anticipates that it is technologically feasible for both nationwide and non-nationwide CMRS providers to identify georouting solutions that work best with their existing networks.”

32. We are not persuaded by the arguments advanced by Intrado that the solution endorsed by CX360 raises privacy concerns due to the Lifeline querying for location data. Intrado argues that text-to-988 georouting solutions must avoid designs that allow the Lifeline to query providers for location information to protect text users' privacy, adding that “wireless providers should remain in full control of user location information with a push of only coarse location.” As CX360 states, however, under its proposed approach, the Lifeline's system would only have access to FIPS codes from wireless providers. AT&T adds that the Lifeline Administrator prefers solutions that provide georouting data only with a user's initial text message in a single conversation series, and that such solutions will likely require the Lifeline to query providers for georouting data. We also note that there is support in the record for including georouting data with the text user's initial message to protect privacy by avoiding the transmission of precise location information to downstream parties. Moreover, we require covered text providers to aggregate location data in order to maintain the privacy interests of 988 text users. We thus reject Intrado's inference that, under the approach suggested by CX360, the “Lifeline Administrator could have access to the location for every device on the carrier's network.”

33. Text-to-911-Based Georouting Solutions. We decline, at this time, to expand the scope of our requirements to georouting solutions that utilize Text Control Centers (TCC) as intermediaries between covered text providers and the Lifeline, as proposed by some commenters. A Text Control Center (TCC) is a controlling functional element specified in a relevant standard for text-to-911. The TCC has the responsibility to “(1) convert various protocols and act as a gateway; (2) request location that may be used for routing; (3) request routing instructions; and (4) initiate a dialogue with the [Public Safety Answering Point (PSAP)] through the appropriate interworking function of the TCC. When the TCC receives an initial text message, it obtains location from the [location server]. It then uses that location to obtain routing instructions from the [routing server]. Then, the TCC converts the text message to an appropriate protocol and initiates a dialogue with the PSAP (via the emergency services network) through the appropriate interworking function of the TCC.” As the Commission emphasized in the 988 Georouting Third Further Notice, SAMHSA, the agency with oversight of the Lifeline Administrator, must ultimately determine the routing data that it will deem acceptable for the Lifeline's system to process. In its comments, the current Lifeline Administrator strongly advises against georouting solutions that leverage text-to-911 infrastructure due to concerns about required modifications to the Lifeline's network and unknown costs and implementation time.

34. While several commenters argue that text-to-911-based georouting solutions could provide benefits for text-to-988 georouting, we are convinced by the record that adopting such proposals at this time would be contrary to our goal of ensuring that georouting is available for 988 text messages without delay. For example, AT&T and CX360 argue that georouting solutions that utilize TCCs introduce an unnecessary “point of failure” and require modifications of the Lifeline's system. The record also raises concerns that using a system designed for 911 in the context of 988 may have a chilling effect due to differing privacy expectations. Several commenters also argue that georouting solutions based on text-to-911 infrastructure may compromise privacy due to access to, and potential inadvertent disclosure of, precise location information. Based on our review of the record, and given the concerns raised by commenters regarding implementation delays and the potential chilling effects associated with using geolocation data in the context of 988, we find that expanding our requirements to allow text-to-911-based georouting solutions is unwarranted at this time. Nevertheless, we encourage all industry stakeholders and the Lifeline Administrator to actively collaborate on the development and improvement of georouting solutions that protect privacy and are compatible with the Lifeline's system.

35. Direct Routing. We also decline to adopt proposals that would bypass the Lifeline's initial direct and centralized routing platform. CPAC recommends an alternative approach to georouting solutions that focuses on providing local crisis centers with “resources necessary to allow them to welcome calls and texts directly,” arguing that this would improve the routing of 988 contacts while prioritizing confidentiality. The Commission previously concluded that the Lifeline's centralized routing process provides numerous benefits, including faster implementation, reduced routing costs, and improved service. In the 988 Georouting Third Further Notice, the Commission also declined to seek comment on text-to-988 georouting solutions that would bypass the Lifeline's centralized routing platform.

36. The record reflects significant support for retaining the Lifeline's existing centralized routing structure. In particular, we are persuaded by commenters that the centralized routing system plays a critical role in managing the capacity of crisis centers, routing text messages to the national back-up center, and minimizing technical burdens placed on crisis centers. As the Lifeline Administrator states, the centralized structure facilitates network monitoring to resolve “any potential issues that arise” and helps ensure that text messages are “routed efficiently to the appropriate crisis contact center.” CX360 adds that this structure allows the “Lifeline Administrator to balance text volumes within a certain geographic area to minimize response times,” helping to connect text users “to the resources they need . . . if a crisis center is particularly busy.” CTIA and CX360 similarly agree that proposals to bypass the Lifeline's centralized routing system “should remain outside the scope of this proceeding.” Based on our review of the record, and consistent with the Commission's proposal and previous conclusions, we find that the benefits of maintaining the Lifeline's centralized routing system greatly exceed the costs of localized routing at this time.

37. Specialized Service Lines. We decline to take specific action to apply our text-to-988 georouting requirements to the Lifeline's specialized service lines. Currently, when an individual texts 988 they are provided options to redirect to specialized service lines, for example, veterans and service members are redirected to text “838255” to reach the Veterans Crisis Line. Individuals may also text “AYUDA” to connect with a Spanish-speaking crisis counselor. The record indicates that individual crisis centers have varying capacities to provide specialized services, which complicates the Lifeline's ability to consistently connect text users with an appropriate local crisis center that handles specialized services. Moreover, we believe that our federal partners at SAMHSA and the VA are best positioned to evaluate the benefits and challenges of using georouting data for specialized service lines.

38. In order to support industry efforts to develop efficient and effective text georouting solutions for the Lifeline, we grant nationwide covered text providers a period of 18 months, and non-nationwide covered text providers a period of 36 months, following the effective date of this Fourth Report and Order in which to comply with the rules we adopt today. We find that this compliance window appropriately balances the need to expeditiously implement 988 text georouting with the burdens on providers of developing the necessary routing systems. In the 988 Georouting Third Further Notice, the Commission proposed a uniform implementation deadline of six months from the effective date of the rules. In response, a broad cross-section of stakeholders submitted arguments that additional time would be needed to sufficiently identify and implement georouting solutions for text-to-988. Commenters emphasized that efforts to identify georouting solutions for text-to-988 compatible with the Lifeline's centralized routing system are in the early stages of development and encourage the Commission to allow for its discovery phase, which could take approximately six to 12 months, to develop without regulatory impediment. The record indicates that the Lifeline Administrator plans to conduct a “discovery” pilot with its vendor and nationwide wireless providers in 2025 to identify, develop, and test text-to-988 georouting solutions, and that it expects the process to take approximately six to 12 months. As such, we disagree with the assertion by the Crisis Text Line that we should not adopt rules requiring text-to-988 georouting because “the length of time required to develop [such] a georouting solution is [] unknown.” The Lifeline Administrator also expects to “leverage its established relationship with industry stakeholders to expedite the georouting process for text messages.” We anticipate that the flexible and technology-neutral landscape that our rules provide will allow industry stakeholders sufficient time to complete their collaborative efforts to identify an industry-based consensus technical solution for text-to-988 georouting.

39. We therefore agree with those commenters who argue that a longer compliance period than that proposed in the 988 Georouting Third Further Notice is warranted. In particular, we note that, at the time the Commission adopted the 988 Georouting Third Report and Order, the nationwide providers were nearing the end of their collaboration with the Lifeline Administrator to develop and test voice georouting solutions. The 988 Georouting Third Report and Order's expedited implementation time frame for nationwide providers reflected this fact. Here, however, the development of technical solutions for text-to-988 georouting remains in its early stages. We recognize the critical need for time and resources to develop and test solutions, and to account for on-going collaboration amongst the Lifeline Administrator, SAMHSA, providers, and 988 Lifeline vendors. The rules we adopt today allow for this process to proceed while at the same time providing certainty that providers should keep working toward a specific completion date. We therefore grant an extended compliance time frame of 18 months for nationwide providers to reflect the time necessary to complete the discovery phase and subsequently implement its findings.

40. Additionally, commenters called for additional time for non-nationwide providers to account for the fact that the 988 Georouting Third Report and Order grants those providers until December 2026 to implement georouting for voice calls to 988. For instance, RWA and Intrado emphasize the burden that imposing overlapping compliance deadlines would have on small and rural service providers and recommend the Commission impose a 36-month compliance time frame for non-nationwide providers. We agree with these commenters that the georouting text-to-988 requirement deadline should not be earlier than the deadline for voice-to-988 georouting. Non-nationwide providers must comply with the 988 Georouting Third Report and Order by December 14, 2026. To account for non-nationwide providers' on-going efforts to comply with our voice-to-988 georouting implementation requirement, we require non-nationwide providers to comply with our 988 text georouting requirements within 36 months following the effective date of this Fourth Report and Order, which, as RWA explains, should allow non-nationwide providers a sufficient compliance period. Based on the record, we are confident that our extended compliance deadline will provide sufficient time for non-nationwide service providers to implement 988 text georouting solutions. We decline a request by CTIA that we “delegate authority to the Wireline Competition Bureau to waive or stay the implementation deadlines” we adopt in this item. CTIA states that it is “hopeful that the 18-month timeline for nationwide providers [to implement text georouting solutions] will be sufficient” but requests a provision under which the Bureau would monitor the development process and provide additional time for compliance, if warranted. As discussed above, we find that the 18- and 36-month deadlines we adopt today will provide ample time for nationwide and non-nationwide providers, respectively, to develop and deploy text-to-988 georouting solutions. Nevertheless, we note that providers may seek a waiver of these deadlines, if necessary, under the Commission's existing rules.

41. We recognize that the effectiveness of text-to-988 georouting benefits from public awareness. To support this, we encourage all stakeholders involved in the delivery and operation of 988 text georouting to engage in outreach that informs the public about the availability and purpose of georouting solutions. Additionally, we direct the Consumer and Governmental Affairs Bureau, in coordination with the Bureau and our federal partners at SAMHSA and the VA, to develop and publish a consumer-facing guide promoting awareness around 988 and access to local crisis services, and what consumers should expect when utilizing text messaging to reach the 988 Lifeline.

42. In response to the 988 Georouting Third Further Notice and 988 Text Georouting Privacy Public Notice commenters raise a number of other issues related to georouting for 988 texts, including proposals related to privacy and data protection protocols, user consent, direct video calling (DVC), 911-988 interoperability, and cost recovery for service providers. As discussed below, we decline to adopt these proposals in this Fourth Report and Order.

43. Privacy and Data Protection Protocols. We decline to adopt specific data privacy and cybersecurity requirements with respect to our text-to-988 rules in this Fourth Report and Order, beyond adopting rules requiring that georouting data is aggregated so that it cannot identify the precise location of the individual contacting the 988 Lifeline. In the 988 Text Georouting Privacy Public Notice, the Bureau noted that privacy and cybersecurity are critical elements in ensuring that individuals contacting the 988 Lifeline have confidence in the program and trust that their identity will remain anonymous. The Bureau therefore sought comment on “any data handling protocols and policies that . . . should be in place to protect the privacy and confidentiality of 988 texters” and on whether to adopt any “additional privacy measures . . . to prevent unintended chilling effects as the Commission continues to enhance the 988 Lifeline through georouting capabilities[.]”

44. The record in this proceeding, including that developed in response to the 988 Text Georouting Privacy Public Notice, highlights the importance of safeguarding user privacy in developing georouting solutions for texts to 988. As discussed above, we find that our approach to 988 text georouting, which relies on coarse location data rather than the precise location of the user's handset, provides an essential, built-in privacy protection for 988 users. We find that this approach obviates the need for additional data protection requirements, which may provide less reliable privacy protection, or require regulating the conduct of entities outside of the Commission's jurisdiction.

45. As several commenters observe, our approach to 988 text georouting mirrors that successfully deployed by the Commission regarding georouting for 988 voice calls. By requiring covered text providers to aggregate location data to a level that does not identify the location of the cell site or base station receiving the 988 text or otherwise identify the precise location of the handset, we ensure that the Lifeline does not receive sensitive location data that may reveal a user's precise location. This “privacy by design” architecture provides significant benefits compared with a system in which more sensitive user data is transmitted by providers to downstream entities that may have varying data security protocols and privacy protections.

46. We also decline to require an informed consent mechanism for georouting text-to-988. While comments submitted by CPAC and EPIC-WA argue that informed consent is necessary and vital to the success of the 988 Lifeline, we conclude that the parameters of our rules effectively minimize the level of personal information transmitted with 988 text messages. Nevertheless, we acknowledge the critical importance of enabling 988 text users to provide meaningful consent and therefore strongly encourage SAMHSA and the Lifeline Administrator to ensure that text users can easily access disclosures about the Lifeline's use of georouting data. We agree that text users contacting the 988 Lifeline should have a high expectation of privacy. We also agree that texters should be made aware of the implications of contacting the Lifeline, particularly as it relates to the collection and use of georouting data.

47. However, we disagree that mandating an informed consent mechanism prior to engaging with the 988 Lifeline will have a net positive impact on individuals seeking help. On the contrary, we find that an informed consent mechanism may have a detrimental impact on the efficacy of the 988 Lifeline and may serve as a barrier to life saving resources. Specifically, we are persuaded by arguments submitted by NAMI, a mental health subject matter expert, that the introduction of an express consent mechanism may be confusing to those in crisis, have unintended deterrent consequences, and undermine confidence in the 988 Lifeline. On balance, we conclude that the benefits of georouting texts to 988 far outweigh the attendant privacy risks. As detailed above, our approach to georouting inherently safeguards individual privacy by precluding the transmission by service providers of precise location data. We also note that our decision not to require a specific consent mechanism in connection with the rules we adopt today is consistent with the Commission's approach in adopting voice-to-988 georouting requirements.

48. Direct Video Calling. We decline, at this time, to expand the present proceeding to include Direct Video Calling (DVC). Accessibility advocates submitted comments in support of georouting requirements for text-to-988 and advocated for similar requirements for DVC. We agree with comments submitted by the Accessibility Organizations that georouting 988 text messages will ensure individuals who are deaf, hard of hearing, or with a speech disability have access to local resources and we conclude such requirements should be implemented without undue delay. In addition to text-to-988, individuals who are deaf, hard of hearing, or have a speech disability may contact the 988 Lifeline through 988 Videophone by dialing 988 with a videophone number. Expanding the scope of our rules to cover DVC may delay implementation of this capability by imposing additional burdens on the Lifeline Administrator and wireless providers as they continue to collaborate on georouting solutions for text-to-988, as well as non-nationwide providers continuing to work to implement georouting solutions for 988 calls. In order to avoid any resulting delays in the adoption of georouting solutions for voice calls and texts to 988, we decline at this time to expand the scope of this proceeding to include DVC.

49. 911-988 Interoperability. We received comments from BRETSA urging us to consider issues pertaining to the interoperability between the 988 Lifeline and 911 services. For example, BRETSA argues that integrating 911 and the 988 Lifeline's systems may be necessary to support the transfer of both emergency and non-emergency call and text messages. As discussed above, we decline at this time to extend the scope of our requirements to georouting solutions that leverage text-to-911-based infrastructure and TCCs as intermediaries for routing purposes. While we recognize the importance of effectively connecting individuals to both 911 and 988, we find that proposals specifically concerning 911-988 interoperability fall outside the scope of this proceeding and therefore we decline to address them further here.

50. Cost Recovery. We decline to adopt RWA's proposal that we establish “a funding mechanism that could at least partly subsidize the efforts of small rural non-nationwide CMRS providers.” RWA estimates that georouting solutions for 988 calls and text messages could increase monthly subscriber costs for small rural non-nationwide CMRS providers by $4.00 to $5.00 and asserts that one of its members reported receiving an estimate of $2,000 to $2,500 per month for implementation costs. RWA also asserts that Universal Service Fund recipients “must keep their pricing comparable” to nationwide providers, and argues that passing implementation costs onto customers will cause competitive harm to small rural non-nationwide providers. The Commission did not propose any cost recovery mechanisms in the 988 Georouting Second Further Notice or the 988 Georouting Third Further Notice. Moreover, as explained below, we find that the benefits of the text-to-988 georouting requirements we adopt today outweigh the costs to covered text providers. To reduce any costs and burdens on non-nationwide providers, we provide non-nationwide covered text providers 36 months to comply with our requirements, as specifically requested by RWA. Additionally, we expect that our flexible, technology-neutral approach will minimize costs and burdens on non-nationwide providers, and we encourage them to collaborate with our federal partners at SAMHSA to identify georouting solutions best suited for their networks.

51. Consistent with our tentative conclusion in the 988 Georouting Third Further Notice, we find that Title III of the Act and the 21st Century Communications and Video Accessibility Act of 2010 (CVAA) provide authority to adopt the rules we promulgate today. We note that no commenter questioned this analysis.

As the United States Supreme Court has long recognized, Title III grants the Commission a “comprehensive mandate” regarding regulation of spectrum usage, and courts have routinely found that Title III provides the Commission with “broad authority to manage spectrum . . . in the public interest.” We find that requiring CMRS providers to implement georouting for 988 text messages will likely accrue significant public interest benefits by connecting text users with more localized public safety and counseling resources that could save lives. Therefore, we conclude that Title III provides sufficient authority for the text-to-988 georouting rules we adopt today with respect to CMRS providers.

52. We also find that the CVAA provides authority to require interconnected text providers to implement georouting for 988 text messages. The CVAA grants us authority to adopt “other regulations . . . as are necessary to achieve reliable, interoperable communication that ensures access by individuals with disabilities to an internet protocol-enabled emergency network, where achievable and technically feasible.” The Commission previously concluded in the Text-to-988 Second Report and Order that the 988 Lifeline constitutes an “emergency network” under the CVAA, and that text-to-988 provides access to emergency services for individuals with disabilities, including those with hearing or speech disabilities. We find that georouting for 988 text messages will further improve access to the Lifeline for people with disabilities. As the Accessibility Organizations argue, text-to-988 georouting will “advance access to emergency services for people who are deaf, hard of hearing, and speech-disabled.” As explained above, the record demonstrates that implementing the text-to-988 georouting requirements adopted in this Fourth Report and Order will be both achievable and technically feasible for covered text providers. We therefore conclude that the CVAA provides additional authority for the rules we adopt today, and the record reflects agreement with our analysis.

53. We find that the benefits of text-to-988 georouting are far in excess of expected implementation costs. We estimate that the suicide mortality reduction benefits alone exceed the industry-wide implementation costs of one solution identified in the record by a factor of three. This estimate does not include the additional benefits of reduced hospitalizations and emergency room visits, and improved quality-of-life from the impact of our rules on a reduction in suicide attempts, nor the unquantifiable benefits of sparing families and communities from the trauma of losing their loved ones. Below we discuss the expected benefits and costs of our rules.

54. Benefits. In the 988 Georouting Third Further Notice, we estimated that text-to-988 might generate a modest mortality-risk reduction of 0.28 youth suicides annually, for which Americans would collectively be willing to pay $3.5 million annually and a total of $16.5 million over five years. The highly text-reliant youth population was chosen to illustrate a lower-bound estimate of text-to-988 georouting benefits, which are likely to increase substantially when mortality reductions for other demographic groups who may also text to 988 are considered. Upon review of the record and the full set of available data, we revise our estimated annual benefits from $3.5 million to $4.75 million. Because 988 was in effect for the entirety of calendar year 2023, we base our revised mortality-reduction benefits estimate on the full year of available suicide data. We update two assumptions for our benefits estimate. First, we reduce our estimate of the fraction of youth 17-and-under who might text instead of call 988 from 50% to 33%. Second, we increase the estimate of youth suicide victims to 1,604 based on the 2023 full-year data. Using the 14% misrouting rate, these assumptions imply that a total of 75 (=1,604 × 0.14 × 33%) youth suicides among those 17-and-under were vulnerable to misrouting. Approximately 3%, or 2.25 (=.03 × 1,604 × 0.14 × 33%), of the youth who are vulnerable to misrouting could have benefited from a locally tailored intervention, which the comment record indicates are often either only available or more quickly available to those in distress when summoned by a local crisis counselor. In short, local interventions amount to time savings. Assuming proper georouting resulted in a 17% reduction in mortality attributable to a one-minute time savings from a faster-arriving, more effective emergency intervention, we estimate that superior local, emergency interventions could have reduced total suicide mortality by 0.38 (=0.17 × 0.03 × 1,604 × 0.14 × 33%) each year. While we do not attempt to place a value on human life, we note that the amount consumers are willing to pay to reduce mortality risk is approximately $12.5 million, using a methodology developed by the U.S. Department of Transportation (DOT) that we have relied on in past orders. We estimate the annual mortality risk reduction for which society would be collectively willing to pay is $4.75 million (=0.38 × $12.5 million). This revision reflects both a downward adjustment based on record evidence indicating a lower likelihood of texts to 988 from youth under 17, and an upward adjustment resulting from the use of a complete year of youth suicide mortality data. Our prior estimate was based on partial 2022 data and therefore underestimated the full-year annual benefits.

55. CPAC offers two comments on the FCC's methodology for estimating the benefits of text-to-988 georouting. First, CPAC raises the possibility of benefits overestimation by cautioning that “SAMHSA reporting reveals that less than 2% of 988 Lifeline contacts require emergency intervention or connection to emergency services. Contrary to the FCC's assumption, [CPAC argues] SAMSHA data indicates that only a very small fraction of calls made to 988 are likely to result in suicide attempts.” We disagree with CPAC's characterization of our estimation. Contrary to its assertion, our analysis does not begin with the pool of youths entertaining suicidal thoughts, known as suicidal ideation, then fail to reduce that pool correctly to the 2% needing emergency intervention. Rather, we begin with the substantially smaller set of actual youth suicides—individuals who, by definition, would have required emergency intervention and are therefore properly included in SAMSHA's 2%—to derive our estimated reduction in suicide mortality. Accordingly, we reject CPAC's assertion that our approach overestimates benefits.

56. Second, CPAC correctly states that SMS text messaging accounts for only 17% of all 988 exchanges. However, that fact alone does not preclude youth under 17 from relying heavily on text-to-988 traffic volume. Indeed, the AFSP-cited 2022 study found that “over [three-quarters] of texts to the Crisis Text Line in one 12-month period were initiated by individuals under the age of 25.” Moreover, data from Los Angeles County's local 988 call center show that youth under 25 make up 31% of all 988 contacts and 60% of all 988 text message contacts. Using Bayes' Theorem, we estimate that the probability of a young person contacting the 988 Lifeline through text rather than call is between 33 and 41 percent. P(text | Age<25) = (P(Age<25 | text) * P(text))/P(Age<25) = (60%*17%)/31% or (75%*17%)/31% = 33% or 41%, depending on which statistic for P(Age<25 | text) is used. Consequently, taking CPAC's argument into consideration, we adjust downward our previous estimate of the likelihood of a person under 17 contacting the 988 Lifeline through text from 50% to 33% so as to be conservative with our estimation of benefits. While our 33% estimate is based on available data for youth under 25 rather than youth under 17, we believe this approach is conservative as it is likely that youth under 17 rely even more heavily on text messaging.

57. In another comment regarding our estimation methodology, which partly rests on the Crisis Text Line's claim that 3% of 988 contacts require a local emergency intervention, the Crisis Text Line clarifies that it is not aware “of evidence to support the assumption that georouting for [text-to-988] would result in faster emergency service responses to suicidal contacts, or a decreased number of completed suicides” or “empirical evidence that connecting a texter with a counselor in their local area would be more likely to save their lives (or save more lives) than connecting them with counselors outside their area with access to their local resources and/or national resources.” Other commenters, however, proffer evidence as to the mortality-reducing benefits of local interventions. Los Angeles County, the country's most populous county with nearly 10 million people, succinctly captures the life-threatening risks of not accessing local interventions: “[f]irst, residents connected to an out-of-area call center may speak with an agent unfamiliar with local resources, such as Psychiatric [Urgent Care Centers'] clinic appointments. Second, even if the agent is familiar with the County's [specially trained] [Field Intervention Team] program [which could be deployed to the caller's location], the referral and response would be delayed since out-of-area call centers do not have a direct referral process. Third, the potential misrouting of calls can be damaging to our residents' confidence in 988.” NAMI polling found that “52% of individuals are more likely to contact 988 in a crisis if they are connected to a crisis counselor in their state/local area.” We therefore confirm our previous assessment that local georouting not only enhances public trust in 988, making those in distress more likely to call, but also increases the effectiveness of interventions.

58. Text-to-988 confers other quantifiable benefits for which we previously elected not to estimate a monetary value in the 988 Georouting Third Further Notice. The largest is the savings in medical, lost-work, and lost-quality-of-life costs of suicide attempts. In 2023, the 82,787 hospitalizations and 63,604 emergency department visits necessitated by acts of self-harm committed by youth 17-and-under cost society a combined total of $7.95 billion in medical expenses, value of lost work, and diminished quality of life. Although we cannot attribute a precise reduction in suicide attempts to text-to-988 georouting, even a modest one-in-one-thousand reduction in suicide attempts would yield annual, societal cost savings of $7.95 million attributable to text-to-988 georouting, which sums to a net present value of $36.4 million over five years.

59. Finally, no discussion of the benefits of suicide reduction would be complete without mentioning the vast, unquantifiable benefit of sparing victims' families, friends, and communities the emotional devastation of losing their youngest members to suicide. Losing youth deprives communities of the future: In calendar year 2023 alone, the 1,604 suicides among youth 17-and-under resulted in a cumulative loss of 79,884 years of life expectancy prior to the age of 65, typically the most productive years for work, childbearing, and social engagement—years whose absence is profoundly felt by their surviving families, friends, and communities. Studies and data suggest that the years prior to age 45 are the most fruitful in many ways. Between 2021 and 2023, peak average fertility for American women occurred between the ages of 20 and 39. For men, mean paternal age is 30.9 years. The literature on productivity suggests that work productivity peaks between ages 35 and 44. Psychologists tell us that social networks, one barometer of social engagement, plateau between the mid-20s and early 30s and continually decrease throughout adulthood and old age.

60. Costs. In the absence of conclusive cost data, the 988 Georouting Third Further Notice sought to resolve competing claims about the cost and difficulty of implementing georouting solutions for text-to-988. RWA responded that 988 georouting solutions, including calls and texts, could cost RWA member carriers $4-$5 per subscriber per month. The support for that cost estimate is one RWA member, which reports receiving an estimate of $2,000-$2,500 per month to implement 988 georouting. RWA's cost anecdote raises several issues. First, RWA commingles both voice-to-988 and text-to-988 georouting, obscuring the individual cost of each georouting capability. Accurately assessing the costs of each routing capability would require a disentangling of costs. Second, RWA's cost estimate may not represent RWA's typical member. The RWA member in question would have had only 500 subscribers for the 988 georouting solution to average $4-$5 per subscriber per month, placing this RWA member in RWA's smallest membership-size tier. Larger carriers would enjoy the average-cost-reducing benefits of scale. Finally, RWA's cost estimate fails to demonstrate a prohibitive cost burden for wireless carriers overall, as certain vendors have indicated that a large share of the costs would be fixed implementation costs for facilities-based CMRS providers with a low marginal cost of georouting an individual text. Number Resource

61. Utilization/Forecast data indicate that there are 57 facilities-based wireless carriers in the United States. Focusing on facilities-based wireless carriers that would incur the costs of any network upgrades provides a reasonable annual implementation cost estimate of one available solution for the entire wireless industry of $1.71 million (=$2,500×57×12). Even doubling this industry-wide estimate for a single solution would still result in implementation costs well below the expected benefits of our rules. In addition, the compliance deadlines of 18 months for nationwide providers and 36 months for non-nationwide providers following the effective date of this Fourth Report and Order will allow providers to manage implementation costs.

62. Providers are currently developing viable text-to-988 georouting solutions. For example, CX360 states that it “is already collaborating with the Lifeline Administrator, wireless carriers and other 988 stakeholders to develop and identify an appropriate text-to-988 georouting solution.” Many of these collaborations are voluntary. Several commenters urge the Commission to refrain from prescribing the specific text-to-988 georouting solution or the timing of its adoption. Permitting flexibility makes the adoption of cost-effective text-to-988 solutions more likely. Without prescribing any single text-to-988 georouting solution, we find no evidence in the record to suggest that the costs associated with implementing text-to-988 georouting solutions are likely to be prohibitive. Indeed, the industry-wide text-to-988 implementation costs of one solution identified in the record are far below the estimated benefits.

63. As required by the Regulatory Flexibility Act of 1980, as amended (RFA), the Federal Communications Commission (Commission) incorporated an Initial Regulatory Flexibility Analysis (IRFA) in the Implementation of the National Suicide Hotline Improvement Act of 2018 Third Further Notice of Proposed Rulemaking ( 988 Georouting Third Further Notice ), released in October 2024. The Commission sought written public comment on the proposals in the 988 Georouting Third Further Notice, including comment on the IFRA. The comments received are addressed below. This Final Regulatory Flexibility Analysis (FRFA) conforms to the RFA and it (or summaries thereof) will be published in the Federal Register .

64. In the Fourth Report and Order, we require covered text providers to develop and implement georouting solutions for 988 text messages. Based on our review of the record, we find that requiring providers to implement a georouting solution for 988 text messages is essential to improving access to the Lifeline's critical mental health crisis and suicide prevention services. The record overwhelming supports the conclusion that georouting for 988 text messages will help connect individuals with more geographically appropriate crisis centers that may have a better understanding of available local resources and unique community stressors. Additionally, as several commenters emphasize, achieving routing parity with voice calls will help to minimize inconsistencies in service quality that may discourage individuals from seeking help, further increasing trust in the 988 Lifeline.

65. In the Fourth Report and Order, we adopt a two-part requirement designed to enhance the Lifeline's ability to connect text users to geographically appropriate crisis centers, while safeguarding the critical privacy interests of individuals seeking life-saving assistance. To enable routing of covered 988 text messages by the Lifeline Administrator to the appropriate crisis center based on the geographic area where the handset is located at the time the text message is initiated, we require small and other covered text providers to: (1) develop the capability to transmit georouting data in a format that is compatible with the Lifeline's system; and (2) provide such georouting data for 988 text messages, when available, to the Lifeline Administrator. In adopting these rules, we support voluntary efforts to identify and develop industry-based georouting solutions for 988 text messages by providing a flexible, technology-neutral framework for our requirements. In order to facilitate ongoing efforts to develop 988 text georouting capabilities, while providing flexibility for smaller providers, we adopt an implementation time frame of 18 months for nationwide providers, and 36 months for non-nationwide providers.

66. Comments regarding the impact of the rules on small entities were filed by the Rural Wireless Association (RWA). RWA expressed concerns that the Commission's proposed mandate to georoute 988 text messages would disproportionately increase costs for small rural non-nationwide Commercial Mobile Radio Service (CMRS) providers and advocated for the Commission to allow non-nationwide providers to implement georouting voluntarily. RWA further suggested that, should the Commission decide to require providers to implement georouting for 988 text messages, the Commission should: “(1) provide small rural non-nationwide CMRS providers at least 36 months to comply with such mandate; and (2) allocate funds to subsidize small rural non-nationwide CMRS providers' efforts to comply with the mandate.” The Fourth Report and Order addresses RWA's comments by adopting a technology-neutral framework and providing non-nationwide providers with 36 months to comply with the georouting requirements, as specifically requested by RWA. As discussed in section F below, the Commission declines to adopt RWA's proposals to allow non-nationwide carriers to implement georouting on a voluntary basis or to subsidize efforts for small covered text providers to comply.

67. Pursuant to the Small Business Jobs Act of 2010, which amended the RFA, the Commission is required to respond to any comments filed by the Chief Counsel for Advocacy of the Small Business Administration (SBA), and provide a detailed statement of any change made to the proposed rules as a result of those comments. The Chief Counsel did not file any comments in response to the proposed rules in this proceeding.

68. The RFA directs agencies to provide a description of, and where feasible, an estimate of the number of small entities that may be affected by the rules adopted herein. The RFA generally defines the term “small entity” as having the same meaning as under the Small Business Act. In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act.” A “small business concern” is one which: (1) is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the SBA.

69. Small Businesses, Small Organizations, Small Governmental Jurisdictions. Our actions, over time, may affect small entities that are not easily categorized at present. We therefore describe three broad groups of small entities that could be directly affected by our actions. First, while there are industry specific size standards for small businesses that are used in the regulatory flexibility analysis, in general, a small business is an independent business having fewer than 500 employees. These types of small businesses represent 99.9% of all businesses in the United States, which translates to 34.75 million businesses. Next, “small organizations” are not-for-profit enterprises that are independently owned and operated and not dominant their field. While we do not have data regarding the number of non-profits that meet that criteria, over 99 percent of nonprofits have fewer than 500 employees. Finally, “small governmental jurisdictions” are defined as cities, counties, towns, townships, villages, school districts, or special districts with populations of less than fifty thousand. Based on the 2022 U.S. Census of Governments data, we estimate that at least 48,724 out of 90,835 local government jurisdictions have a population of less than 50,000.

70. Wired Telecommunications Carriers. The U.S. Census Bureau defines this industry as establishments primarily engaged in operating and/or providing access to transmission facilities and infrastructure that they own and/or lease for the transmission of voice, data, text, sound, and video using wired communications networks. Transmission facilities may be based on a single technology or a combination of technologies. Establishments in this industry use the wired telecommunications network facilities that they operate to provide a variety of services, such as wired telephony services, including VoIP services, wired (cable) audio and video programming distribution, and wired broadband internet services. By exception, establishments providing satellite television distribution services using facilities and infrastructure that they operate are included in this industry. Wired Telecommunications Carriers are also referred to as wireline carriers or fixed local service providers.

71. The SBA small business size standard for Wired Telecommunications Carriers classifies firms having 1,500 or fewer employees as small. U.S. Census Bureau data for 2017 show that there were 3,054 firms that operated in this industry for the entire year. Of this number, 2,964 firms operated with fewer than 250 employees. Additionally, based on Commission data in the 2024 Universal Service Monitoring Report, in 2023 there were 4,682 providers that reported they were engaged in the provision of fixed local services. Of these providers, the Commission estimates that 4,276 providers have 1,500 or fewer employees. Consequently, using the SBA's small business size standard, most of these providers can be considered small entities.

72. Local Exchange Carriers (LECs). Neither the Commission nor the SBA has developed a size standard for small businesses specifically applicable to local exchange services. Providers of these services include both incumbent and competitive local exchange service providers. Wired Telecommunications Carriers is the closest industry with an SBA small business size standard. Wired Telecommunications Carriers are also referred to as wireline carriers or fixed local service providers. The SBA small business size standard for Wired Telecommunications Carriers classifies firms having 1,500 or fewer employees as small. U.S. Census Bureau data for 2017 show that there were 3,054 firms that operated in this industry for the entire year. Of this number, 2,964 firms operated with fewer than 250 employees. Additionally, based on Commission data in the 2022 Universal Service Monitoring Report, in 2023 there were 4,904 providers that reported they were fixed local exchange service providers. Of these providers, the Commission estimates that 4,493 providers have 1,500 or fewer employees. Consequently, using the SBA's small business size standard, most of these providers can be considered small entities.

73. Incumbent Local Exchange Carriers (Incumbent LECs). Neither the Commission nor the SBA have developed a small business size standard specifically for incumbent local exchange carriers. Wired Telecommunications Carriers is the closest industry with an SBA small business size standard. The SBA small business size standard for Wired Telecommunications Carriers classifies firms having 1,500 or fewer employees as small. U.S. Census Bureau data for 2017 show that there were 3,054 firms in this industry that operated for the entire year. Of this number, 2,964 firms operated with fewer than 250 employees. Additionally, based on Commission data in the 2024 Universal Service Monitoring Report, in 2023 there were 1,175 providers that reported they were incumbent local exchange service providers. Of these providers, the Commission estimates that 917 providers have 1,500 or fewer employees. Consequently, using the SBA's small business size standard, the Commission estimates that the majority of incumbent local exchange carriers can be considered small entities.

74. Competitive Local Exchange Carriers (CLECs). Neither the Commission nor the SBA has developed a size standard for small businesses specifically applicable to local exchange services. Providers of these services include several types of competitive local exchange service providers. Wired Telecommunications Carriers is the closest industry with a SBA small business size standard. The SBA small business size standard for Wired Telecommunications Carriers classifies firms having 1,500 or fewer employees as small. U.S. Census Bureau data for 2017 show that there were 3,054 firms that operated in this industry for the entire year. Of this number, 2,964 firms operated with fewer than 250 employees. Additionally, based on Commission data in the 2024 Universal Service Monitoring Report, in 2023 there were 3,729 providers that reported they were competitive local service providers. Of these providers, the Commission estimates that 3,576 providers have 1,500 or fewer employees. Consequently, using the SBA's small business size standard, most of these providers can be considered small entities.

75. Interexchange Carriers (IXCs). Neither the Commission nor the SBA have developed a small business size standard specifically for Interexchange Carriers. Wired Telecommunications Carriers is the closest industry with a SBA small business size standard. The SBA small business size standard for Wired Telecommunications Carriers classifies firms having 1,500 or fewer employees as small. U.S. Census Bureau data for 2017 show that there were 3,054 firms that operated in this industry for the entire year. Of this number, 2,964 firms operated with fewer than 250 employees. Additionally, based on Commission data in the 2022 Universal Service Monitoring Report, as of December 31, 2021, there were 127 providers that reported they were engaged in the provision of interexchange services. Of these providers, the Commission estimates that 109 providers have 1,500 or fewer employees. Consequently, using the SBA's small business size standard, the Commission estimates that the majority of providers in this industry can be considered small entities.

76. Local Resellers. Neither the Commission nor the SBA have developed a small business size standard specifically for Local Resellers. Telecommunications Resellers is the closest industry with a SBA small business size standard. The Telecommunications Resellers industry comprises establishments engaged in purchasing access and network capacity from owners and operators of telecommunications networks and reselling wired and wireless telecommunications services (except satellite) to businesses and households. Establishments in this industry resell telecommunications; they do not operate transmission facilities and infrastructure. Mobile virtual network operators (MVNOs) are included in this industry. The SBA small business size standard for Telecommunications Resellers classifies a business as small if it has 1,500 or fewer employees. U.S. Census Bureau data for 2017 show that 1,386 firms in this industry provided resale services for the entire year. Of that number, 1,375 firms operated with fewer than 250 employees. Additionally, based on Commission data in the 2024 Universal Service Monitoring Report, in 2023 there were 222 providers that reported they were engaged in the provision of local resale services. Of these providers, the Commission estimates that 217providers have 1,500 or fewer employees. Consequently, using the SBA's small business size standard, most of these providers can be considered small entities.

77. Toll Resellers. Neither the Commission nor the SBA have developed a small business size standard specifically for Toll Resellers. Telecommunications Resellers is the closest industry with a SBA small business size standard. The Telecommunications Resellers industry comprises establishments engaged in purchasing access and network capacity from owners and operators of telecommunications networks and reselling wired and wireless telecommunications services (except satellite) to businesses and households. Establishments in this industry resell telecommunications; they do not operate transmission facilities and infrastructure. Mobile virtual network operators (MVNOs) are included in this industry. The SBA small business size standard for Telecommunications Resellers classifies a business as small if it has 1,500 or fewer employees. U.S. Census Bureau data for 2017 show that 1,386 firms in this industry provided resale services for the entire year. Of that number, 1,375 firms operated with fewer than 250 employees. Additionally, based on Commission data in the 2024 Universal Service Monitoring Report, in 2023 there were 411 providers that reported they were engaged in the provision of toll services. Of these providers, the Commission estimates that 398 providers have 1,500 or fewer employees. Consequently, using the SBA's small business size standard, most of these providers can be considered small entities.

78. Other Toll Carriers. Neither the Commission nor the SBA has developed a definition for small businesses specifically applicable to Other Toll Carriers. This category includes toll carriers that do not fall within the categories of interexchange carriers, operator service providers, prepaid calling card providers, satellite service carriers, or toll resellers. Wired Telecommunications Carriers is the closest industry with a SBA small business size standard. The SBA small business size standard for Wired Telecommunications Carriers classifies firms having 1,500 or fewer employees as small. U.S. Census Bureau data for 2017 show that there were 3,054 firms in this industry that operated for the entire year. Of this number, 2,964 firms operated with fewer than 250 employees. Additionally, based on Commission data in the 2024 Universal Service Monitoring Report, in 2023 there were 74 providers that reported they were engaged in the provision of other toll services. Of these providers, the Commission estimates that 71 providers have 1,500 or fewer employees. Consequently, using the SBA's small business size standard, most of these providers can be considered small entities.

79. Prepaid Calling Card Providers. Neither the Commission nor the SBA has developed a small business size standard specifically for prepaid calling card providers. Telecommunications Resellers is the closest industry with a SBA small business size standard. The Telecommunications Resellers industry comprises establishments engaged in purchasing access and network capacity from owners and operators of telecommunications networks and reselling wired and wireless telecommunications services (except satellite) to businesses and households. Establishments in this industry resell telecommunications; they do not operate transmission facilities and infrastructure. Mobile virtual network operators (MVNOs) are included in this industry. The SBA small business size standard for Telecommunications Resellers classifies a business as small if it has 1,500 or fewer employees. U.S. Census Bureau data for 2017 show that 1,386 firms in this industry provided resale services for the entire year. Of that number, 1,375 firms operated with fewer than 250 employees. Additionally, based on Commission data in the 2024 Universal Service Monitoring Report, in 2023 there were 47 providers that reported they were engaged in the provision of prepaid card services. Of these providers, the Commission estimates that 47 providers have 1,500 or fewer employees. Consequently, using the SBA's small business size standard, most of these providers can be considered small entities.

80. Wireless Telecommunications Carriers (except Satellite). This industry comprises establishments engaged in operating and maintaining switching and transmission facilities to provide communications via the airwaves. Establishments in this industry have spectrum licenses and provide services using that spectrum, such as cellular services, paging services, wireless internet access, and wireless video services. The SBA size standard for this industry classifies a business as small if it has 1,500 or fewer employees. U.S. Census Bureau data for 2017 show that there were 2,893 firms in this industry that operated for the entire year. Of that number, 2,837 firms employed fewer than 250 employees. Additionally, based on Commission data in the 2024 Universal Service Monitoring Report, in 2023 there were 585 providers that reported they were engaged in the provision of wireless services. Of these providers, the Commission estimates that 498 providers have 1,500 or fewer employees. Consequently, using the SBA's small business size standard, most of these providers can be considered small entities.

81. Cable and Other Subscription Programming. The U.S. Census Bureau defines this industry as establishments primarily engaged in operating studios and facilities for the broadcasting of programs on a subscription or fee basis. The broadcast programming is typically narrowcast in nature ( e.g., limited format, such as news, sports, education, or youth-oriented). These establishments produce programming in their own facilities or acquire programming from external sources. The programming material is usually delivered to a third party, such as cable systems or direct-to-home satellite systems, for transmission to viewers. The SBA small business size standard for this industry classifies firms with annual receipts less than $47 million as small. Based on U.S. Census Bureau data for 2017, 378 firms operated in this industry during that year. Of that number, 149 firms operated with revenue of less than $25 million a year and 44 firms operated with revenue of $25 million or more. Based on this data, the Commission estimates that a majority of firms in this industry are small.

82. Cable Companies and Systems (Rate Regulation). The Commission has developed its own small business size standard for the purpose of cable rate regulation. Under the Commission's rules, a “small cable company” is one serving 400,000 or fewer subscribers nationwide. Based on industry data, there are about 420 cable companies in the U.S. Of these, only seven have more than 400,000 subscribers. In addition, under the Commission's rules, a “small system” is a cable system serving 15,000 or fewer subscribers. Based on industry data, there are about 4,139 cable systems (headends) in the U.S. Of these, about 639 have more than 15,000 subscribers. Accordingly, the Commission estimates that the majority of cable companies and cable systems are small.

83. Cable System Operators (Telecom Act Standard). The Communications Act of 1934, as amended, contains a size standard for a “small cable operator,” which is “a cable operator that, directly or through an affiliate, serves in the aggregate fewer than one percent of all subscribers in the United States and is not affiliated with any entity or entities whose gross annual revenues in the aggregate exceed $250,000,000.” For purposes of the Telecom Act Standard, the Commission determined that a cable system operator that serves fewer than 498,000 subscribers, either directly or through affiliates, will meet the definition of a small cable operator. Based on industry data, only six cable system operators have more than 498,000 subscribers. Accordingly, the Commission estimates that the majority of cable system operators are small under this size standard. We note however, that the Commission neither requests nor collects information on whether cable system operators are affiliated with entities whose gross annual revenues exceed $250 million. Therefore, we are unable at this time to estimate with greater precision the number of cable system operators that would qualify as small cable operators under the definition in the Communications Act.

84. All Other Telecommunications. This industry is comprised of establishments primarily engaged in providing specialized telecommunications services, such as satellite tracking, communications telemetry, and radar station operation. This industry also includes establishments primarily engaged in providing satellite terminal stations and associated facilities connected with one or more terrestrial systems and capable of transmitting telecommunications to, and receiving telecommunications from, satellite systems. Providers of internet services ( e.g. dial-up ISPs) or Voice over internet Protocol (VoIP) services, via client-supplied telecommunications connections are also included in this industry. The SBA small business size standard for this industry classifies firms with annual receipts of $40 million or less as small. U.S. Census Bureau data for 2017 show that there were 1,079 firms in this industry that operated for the entire year. Of those firms, 1,039 had revenue of less than $25 million. Based on this data, the Commission estimates that the majority of “All Other Telecommunications” firms can be considered small.

85. Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing. This industry comprises establishments primarily engaged in manufacturing radio and television broadcast and wireless communications equipment. Examples of products made by these establishments are: transmitting and receiving antennas, cable television equipment, GPS equipment, pagers, cellular phones, mobile communications equipment, and radio and television studio and broadcasting equipment. The SBA small business size standard for this industry classifies businesses having 1,250 employees or less as small. U.S. Census Bureau data for 2017 show that there were 656 firms in this industry that operated for the entire year. Of this number, 624 firms had fewer than 250 employees. Thus, under the SBA size standard, the majority of firms in this industry can be considered small.

86. Semiconductor and Related Device Manufacturing. This industry comprises establishments primarily engaged in manufacturing semiconductors and related solid state devices. Examples of products made by these establishments are integrated circuits, memory chips, microprocessors, diodes, transistors, solar cells and other optoelectronic devices. The SBA small business size standard for this industry classifies entities having 1,250 or fewer employees as small. U.S. Census Bureau data for 2017 show that there were 729 firms in this industry that operated for the entire year. Of this total, 673 firms operated with fewer than 250 employees. Thus under the SBA size standard, the majority of firms in this industry can be considered small.

87. Software Publishers. This industry comprises establishments primarily engaged in computer software publishing or publishing and reproduction. Establishments in this industry carry out operations necessary for producing and distributing computer software, such as designing, providing documentation, assisting in installation, and providing support services to software purchasers. These establishments may design, develop, and publish, or publish only. The SBA small business size standard for this industry classifies businesses having annual receipts of $47 million or less as small. U.S. Census Bureau data for 2017 indicate that 7,842 firms in this industry operated for the entire year. Of this number 7,226 firms had revenue of less than $25 million. Based on this data, we conclude that a majority of firms in this industry are small.

88. Internet Service Providers (Non-Broadband). Internet access service providers using client-supplied telecommunications connections ( e.g., dial-up ISPs) as well as VoIP service providers using client-supplied telecommunications connections fall in the industry classification of All Other Telecommunications. The SBA small business size standard for this industry classifies firms with annual receipts of $40 million or less as small. For this industry, U.S. Census Bureau data for 2017 show that there were 1,079 firms in this industry that operated for the entire year. Of those firms, 1,039 had revenue of less than $25 million. Consequently, under the SBA size standard a majority of firms in this industry can be considered small.

89. Wired Broadband Internet Access Service Providers (Wired ISPs). Providers of wired broadband internet access service include various types of providers except dial-up internet access providers. Wireline service that terminates at an end user location or mobile device and enables the end user to receive information from and/or send information to the internet at information transfer rates exceeding 200 kilobits per second (kbps) in at least one direction is classified as a broadband connection under the Commission's rules. Wired broadband internet services fall in the Wired Telecommunications Carriers industry. The SBA small business size standard for this industry classifies firms having 1,500 or fewer employees as small. U.S. Census Bureau data for 2017 show that there were 3,054 firms that operated in this industry for the entire year. Of this number, 2,964 firms operated with fewer than 250 employees.

90. Additionally, according to Commission data on internet access services as of June 30, 2024, nationwide there were approximately 2,204 providers of connections over 200 kbps in at least one direction using various wireline technologies. The Commission does not collect data on the number of employees for providers of these services, therefore, at this time we are not able to estimate the number of providers that would qualify as small under the SBA's small business size standard. However, in light of the general data on fixed technology service providers in the Commission's 2024 Communications Marketplace Report, we believe that the majority of wireline internet access service providers can be considered small entities.

91. Wireless Broadband Internet Access Service Providers (Wireless ISPs or WISPs). Providers of wireless broadband internet access service include fixed and mobile wireless providers. The Commission defines a WISP as “[a] company that provides end-users with wireless access to the internet[.]” Wireless service that terminates at an end user location or mobile device and enables the end user to receive information from and/or send information to the internet at information transfer rates exceeding 200 kilobits per second (kbps) in at least one direction is classified as a broadband connection under the Commission's rules. Neither the SBA nor the Commission have developed a size standard specifically applicable to Wireless Broadband Internet Access Service Providers. The closest applicable industry with an SBA small business size standard is Wireless Telecommunications Carriers (except Satellite). The SBA size standard for this industry classifies a business as small if it has 1,500 or fewer employees. U.S. Census Bureau data for 2017 show that there were 2,893 firms in this industry that operated for the entire year. Of that number, 2,837 firms employed fewer than 250 employees.

92. Additionally, according to Commission data on internet access services as of June 30, 2024, nationwide there were approximately 1,157 fixed wireless and 52 mobile wireless providers of connections over 200 kbps in at least one direction. The Commission does not collect data on the number of employees for providers of these services, therefore, we are not able to estimate the number of providers that would qualify as small. However, based on data in the Commission's 2024 Communications Marketplace Report on the small number of large mobile wireless nationwide and regional facilities-based providers, the dozens of small regional facilities-based providers and the number of wireless mobile virtual network providers in general, as well as on terrestrial fixed wireless broadband providers in general, we believe that the majority of wireless internet access service providers can be considered small entities.

93. All Other Information Services. This industry comprises establishments primarily engaged in providing other information services (except news syndicates, libraries, archives, internet publishing and broadcasting, and Web search portals). The SBA small business size standard for this industry classifies firms with annual receipts of $47 million or less as small. U.S. Census Bureau data for 2017 show that there were 704 firms in this industry that operated for the entire year. Of those firms, 556 had revenue of less than $25 million. Consequently, we estimate that the majority of firms in this industry are small entities.

94. The RFA directs agencies to describe the economic impact of the adopted rules on small entities, as well as projected reporting, recordkeeping and other compliance requirements, including an estimate of the classes of small entities which will be subject to the requirement and the type of professional skills necessary for preparation of the report or record.

95. The Fourth Report and Order adopts rules that require small and other covered 988 text providers to implement georouting solutions for 988 text messages sent in Short Message Service (SMS) format. Specifically, the Fourth Report and Order requires providers to develop the capability to transmit georouting data in a format that is compatible with the Lifeline system and to provide such georouting data for 988 text messages, when available, to the Lifeline Administrator. Small and other providers must provide georouting data with 988 messages sufficient to allow routing of the 988 text message by the Lifeline Administrator to the appropriate crisis center based on the geographic area where the handset is located at the time the 988 text message is sent. The Fourth Report and Order adopts a definition of georouting data consistent with that used in the Third Report and Order, and requires wireless providers to aggregate location data generated from cell-based location technology to a level that will not identify the location of the cell site or base station receiving the 988 text message or otherwise identify the precise location of the handset.

96. In the Third Further Notice, the Commission sought comment on the costs and benefits of deploying georouting solutions for text-to-988. We found issues with the cost estimates for small carriers provided by RWA because the data is based on a single carrier and commingles voice-to-988 and text-to-988 georouting. Nonetheless, in the Fourth Report and Order we acknowledge the operational limitations of small providers and the added cost georouting may impose, and sought to minimize compliance burdens where practicable. The Fourth Report and Order therefore, adopts technology-neutral rules that allow providers the flexibility to leverage georouting solutions identified by the Lifeline Administrator and industry partners. Additionally, the Fourth Report and Order adopts an extended time frame for non-nationwide providers, which includes smaller entities, to allow for more time to identify and implement georouting solutions for text-to-988. Non-nationwide covered text providers will have 36 months from the effective date of the order to implement georouting solutions, while nationwide covered text providers must comply within 18 months. The Commission finds that the estimated mortality-reducing public safety benefits resulting from the requirements adopted in the Fourth Report and Order far outweigh the anticipated implementation costs.

97. The RFA requires an agency to provide, “a description of the steps the agency has taken to minimize the significant economic impact on small entities . . . including a statement of the factual, policy, and legal reasons for selecting the alternative adopted in the final rule and why each one of the other significant alternatives to the rule considered by the agency which affect the impact on small entities was rejected.”

98. The Fourth Report and Order considers comments that argue georouting solutions disproportionately impact small rural non-nationwide providers. Specifically, RWA argues that any mandate to require georouting for 988 text messages will have a disproportionately negative impact on small rural non-nationwide providers and therefore proposes several solutions which include: (1) voluntary implementation requirements, (2) cost mitigation, and (3) an implementation time frame of 36 months. The Commission acknowledges that small rural non-nationwide providers face operational and financial limitations. Therefore, we adopt rules that are designed to give covered providers, which include small providers, the flexibility to determine the best georouting solution to comply with these rules based on the needs of the provider's network.

99. The Commission concludes that a wholly voluntary implementation of georouting solutions undercuts the Commission's objective to deploy the benefits of georouting for 988 text messages in a timely manner and therefore declines to rely on voluntary implementation for small entities. The record strongly demonstrates that georouting 988 text message will provide significant benefits to individuals with disabilities, disproportionately impacted populations, and rural communities. Therefore, given the clear public interest benefits, we find that deployment and implementation of georouting solutions for 988 text messages should not be optional.

100. Some commenters propose that 988 text messages be sent in other formats and with precise location information. We consider but decline to adopt proposals that would require georouting for Multimedia Message Service (MMS) in favor of enabling the 988 Lifeline to leverage current SMS technology while developing solutions that could adapt to other messaging protocols in the future. The Commission also considers but declines to require that precise location information be transmitted with 988 text messages, and finds that aggregating location data at county-level or wire center boundaries will better protect users' privacy. Likewise, we decline to adopt proposals that would bypass the Lifeline's routing platform or apply the text-to-988 georouting to the Lifeline's specialized service lines because the record reflects that individual crisis centers have varied capability in their ability to provide specialized services.

101. Further, the Commission declines to adopt RWA's proposed cost recovery provisions that seek to mitigate implementation costs of georouting 988 text messages. We expect that our flexible, technology-neutral approach will minimize costs and burdens on non-nationwide providers, and we encourage them to collaborate with our federal partners at SAMHSA to identify georouting solutions best suited for their networks. After consideration we additionally decline to adopt a number of additional proposals that would require specific privacy and cybersecurity requirements and informed consent mechanisms because they would have the negative effect of discouraging users from contacting the 988 Lifeline. We also decline to expand these rules to Direct Video Calling (DVC) because doing so may result in implementation delays for georouting solutions, and users who are who are deaf, hard of hearing, or with a speech disability will benefit from having access to local resources using text-to-988. In adopting these rules, we support voluntary efforts to identify and develop industry-based georouting solutions for 988 text messages by providing a flexible, technology-neutral framework for our requirements.

102. To provide small rural non-nationwide providers with added flexibility, the Commission adopts an implementation timeline of 36 months for non-nationwide providers, as proposed by RWA. This exceeds the six-month timeline originally proposed in the 988 Georouting Third Further Notice and is twice as long as the 18-month timeline for nationwide providers. We anticipate the longer implementation timeline will enable small providers sufficient time to absorb capital and maintenance costs that are required to develop and implement georouting solutions for 988 text messages.

103. The Commission will send a copy of the Fourth Report and Order, including this Final Regulatory Flexibility Analysis, in a report to Congress pursuant to the Congressional Review Act. In addition, the Commission will send a copy of the Fourth Report and Order, including this Final Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the SBA and will publish a copy of the Fourth Report and Order, and this Final Regulatory Flexibility Analysis (or summaries thereof) in the Federal Register .

104. Paperwork Reduction Act. This document does not contain new or substantively modified information collections subject to the Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. 3501-3521. In addition, therefore, it does not contain any new or modified information collection burden for small business concerns with fewer than 25 employees, pursuant to the Small Business Paperwork Relief Act of 2002, 44 U.S.C. 3506(c)(4).

105. Congressional Review Act. The Commission has determined, and the Administrator of the Office of Information and Regulatory Affairs, Office of Management and Budget, concurs that this rule is “non-major” under the Congressional Review Act, 5 U.S.C. 804(2). The Commission will send a copy of this Fourth Report and Order to Congress and the Government Accountability Office pursuant to 5 U.S.C. 801(a)(1)(A).

106. Accordingly, it is ordered that, pursuant to sections 1, 2, 4, 301, 303, 307, 309(a), 316, 332 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 152, 154, 301, 303, 307, 309(a), 316, 332, and section 106 of the Twenty-First Century Communications and Video Accessibility Act of 2010, Public Law 111-260, 47 U.S.C. 615c, this Fourth Report and Order is adopted .

107. It is further ordered that part 52 of the Commission's rules is amended as set forth in Appendix A, and such rule amendment will become effective 30 days after publication in the Federal Register .

108. It is further ordered that the Commission's Office of the Secretary shall send a copy of this Fourth Report and Order, including the Final Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of the Small Business Administration.

109. It is further ordered that the Office of the Managing Director, Performance and Program Management, shall send a copy of this Fourth Report and Order in a report to be sent to Congress and the Government Accountability Office pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).

For the reasons discussed in the preamble, the Federal Communications Commission amends 47 CFR part 52 as follows:

This document announces that the Office of Management and Budget (OMB) approved the information collection requirements in 47 CFR 64.1200(o) on August 5, 2025. The OMB control number that the information collection was approved under is 3060-1306. In the Eighth Report and Order, the Commission concluded that the appropriate timeframe for implementation of these new rules is ninety days following publication in the Federal Register of notice that OMB has completed any required review of the adopted rules. The Commission publishes this document as an announcement of the effect date of these rules.

The full text of document FCC 25-15 is available online at https://docs.fcc.gov/public/attachments/FCC-25-15A1_Rcd.pdf. To request this document in accessible formats for people with disabilities ( e.g., Braille, large print, electronic files, audio format) or to request reasonable accommodations ( e.g., accessible format documents, sign language interpreters, CART), send an email to fcc504@fcc.gov or call the FCC's Consumer and Governmental Affairs Bureau at (202) 418-0530 (voice).

The fishery for coastal migratory pelagic fish in the Atlantic includes king mackerel, Spanish mackerel, and cobia on the east coast of Florida, and is managed under the Fishery Management Plan for Coastal Migratory Pelagic Resources of the Gulf and Atlantic Region (FMP). The FMP was prepared by the Gulf and South Atlantic Fishery Management Councils and NMFS, was approved by the Secretary of Commerce, and is implemented by NMFS through regulations at 50 CFR part 622 under the authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act). All weights described for Spanish mackerel in the Atlantic EEZ apply as either round or gutted weight.

Atlantic Spanish mackerel are divided into northern and southern zones for management purposes. The northern zone for Spanish mackerel extends in the Atlantic EEZ from New York through North Carolina. The northern boundary of the northern zone extends from an intersection point off New York, Connecticut, and Rhode Island at 41°18′16.249″ N latitude and 71°54′28.477″ W longitude, and proceeds southeast to 37°22′32.75″ N latitude and the intersection point with the outward boundary of the EEZ. The southern boundary of the northern zone extends from the North Carolina and South Carolina state border along a line in a direction of 135°34′55″ from true north beginning at 33°51′07.9″ N latitude and 78°32′32.6″ W longitude to the intersection point with the outward boundary of the EEZ (50 CFR 622.369(b)(2)). See figure 2 of appendix G to part 622—Spanish Mackerel for an illustration of the management zones.

The commercial annual catch limit (ACL; equal to the commercial quota) for the Atlantic migratory group of Spanish mackerel (Atlantic Spanish mackerel) is 3.33 million pounds (lb) or 1.51 million kilograms (kg) (50 CFR 622.384(c)(2)). The commercial quota for Atlantic Spanish mackerel in the northern zone is 662,670 lb (300,582 kg) and is 2,667,330 lb (1,209,881 kg) in the southern zone for the 2025-2026 fishing year, which is March 1, 2025, through February 28, 2026 (50 CFR 622.384(c)(2)(i) and (ii)).

Regulations at 50 CFR 622.384(c)(2)(iii) allow for quota transfers between the northern and southern zones with the approval from the Regional Administrator (RA) of the NMFS Southeast Region. North Carolina or Florida, in consultation with the other states in the respective zones, may request approval from the RA to transfer part or all of a respective zone's annual commercial quota to the other zone. For the purposes of quota closures as described in 50 CFR 622.8, the receiving zone's quota will be the original quota plus any transferred amount, for that fishing year only. Landings associated with any transferred quota will be included in the total landings for Atlantic Spanish mackerel, which will be evaluated relative to the total ACL.

In a letter to NMFS dated July 22, 2025, the State of Florida requested the transfer of 250,000 lb (113,398 kg) of Atlantic Spanish mackerel commercial quota from the southern zone to the northern zone to allow the commercial quota for both zones in the current fishing year to be fully harvested. NMFS approved the transfer of commercial quota, and therefore, the revised northern zone commercial quota for Spanish mackerel is 912,670 lb (413,980 kg) and the revised southern zone commercial quota is 2,417,330 lb (1,096,482 kg) for the 2025-2026 fishing year.

Regulations at 50 CFR 622.388(d)(1)(i) require NMFS to close the commercial sector for Atlantic Spanish mackerel in the northern zone when landings reach or are projected to reach the commercial quota for that zone. NMFS projects that landings of Atlantic Spanish mackerel from the northern zone will reach the revised commercial quota of 912,670 lb (413,980 kg) on September 20, 2025. Accordingly, the commercial sector for Atlantic Spanish mackerel in the northern zone is closed effective on September 20, 2025, and continues through February 28, 2026, the end of the current fishing year.

During the commercial closure, a person on a vessel that has been issued a valid Federal commercial permit to harvest Atlantic Spanish mackerel may continue to retain this species in the northern zone under the recreational bag and possession limits specified in 50 CFR 622.382(a)(1)(iii) and (2)(i), if recreational harvest of Atlantic Spanish mackerel in the northern zone has not been closed (50 CFR 622.384(e)(1)).

Also during the commercial closure, Atlantic Spanish mackerel from the northern zone, including those fish harvested under the recreational bag and possession limits, may not be purchased or sold. This prohibition does not apply to Atlantic Spanish mackerel from the northern zone that were harvested, landed ashore, and sold prior to the closure and were held in cold storage by a dealer or processor (50 CFR 622.384(e)(2)).

NMFS issues this action pursuant to section 305(d) of the Magnuson-Stevens Act. This action is required by 50 CFR 622.388(d)(1)(i), which was issued pursuant to section 304(b) of the Magnuson-Stevens Act, and is exempt from review under Executive Order 12866.

Pursuant to 5 U.S.C. 553(b)(B), there is good cause to waive prior notice and an opportunity for public comment on this action, as notice and comment are unnecessary and contrary to the public interest. Such procedures are unnecessary because the rule implementing the commercial quota and AM has already been subject to notice and public comment, and all that remains is to notify the public of the closure. Such procedures are also contrary to the public interest because of the need to immediately implement the closure to protect the resource of Atlantic Spanish mackerel, because the capacity of the fishing fleet allows for rapid harvest of the commercial quota. Prior notice and opportunity for public comment would require time and could result in additional harvest that exceeds the established commercial quota.

For the same reasons, there is good cause to waive the 30-day delay in the effectiveness of this action under 5 U.S.C. 553(d)(3).

Regulations governing the Atlantic bluefish fishery are found in 50 CFR 648.160 through 648.167. These regulations require annual specification of a commercial quota that is apportioned among the coastal states from Maine through Florida. The process to set the annual commercial quota and the percent allocated to each state is described in § 648.162, and the final 2025 allocations were published on December 10, 2024 (89 FR 99138).

The final rule implementing amendment 1 to the FMP, as published in the Federal Register on July 26, 2000 (65 FR 45844), provided a mechanism for transferring bluefish commercial quota from one state to another. Two or more states, under mutual agreement and with the concurrence of the NMFS Greater Atlantic Regional Administrator, can request approval to transfer or combine bluefish commercial quota under § 648.162(e). The Regional Administrator is required to consider three criteria in the evaluation of requests for quota transfers or combinations: (1) the transfers would not preclude the overall annual quota from being fully harvested; (2) the transfers address an unforeseen variation or contingency in the fishery; and (3) the transfers are consistent with the objectives of the FMP and the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act). The Regional Administrator has determined these criteria have been met for the transfers approved in this notification.

Massachusetts is transferring 100,000 pounds (lb) (45,359 kilograms (kg)) to North Carolina through mutual agreement of the states. This transfer was requested to ensure North Carolina would not exceed its 2025 state quota. The revised bluefish quotas for 2025 are: Massachusetts, 162,663 lb (73,783 kg) and North Carolina, 1,072,012 lb (486,256 kg).

NMFS issues this action pursuant to section 305(d) of the Magnuson-Stevens Act. This action is required by 50 CFR 648.162(e)(1)(i) through (iii), which was issued pursuant to section 304(b), and is exempted from review under Executive Order 12866.

Regulations governing the summer flounder fishery are found in 50 CFR 648.100 through 648.111. These regulations require annual specification of a commercial quota that is apportioned among the coastal states from Maine through North Carolina. The process to set the annual commercial quota and the percent allocated to each state is described in § 648.102, and the final 2025 allocations were published on December 10, 2024 (89 FR 99138).

The final rule implementing Amendment 5 to the FMP, as published in the Federal Register on December 17, 1993 (58 FR 65936), provided a mechanism for transferring summer flounder commercial quota from one state to another. Two or more states, under mutual agreement and with the concurrence of the NMFS Greater Atlantic Regional Administrator, can transfer or combine summer flounder commercial quota under § 648.102(c)(2). The Regional Administrator is required to consider three criteria in the evaluation of requests for quota transfers or combinations: (1) the transfers or combinations would not preclude the overall annual quota from being fully harvested; (2) the transfers address an unforeseen variation or contingency in the fishery; and (3) the transfers are consistent with the objectives of the FMP and the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act). The Regional Administrator has determined these three criteria have been met for the transfer approved in this notification.

North Carolina is transferring 50,000 pounds (lb; 22,680 kilograms (kg)) of summer flounder to New York through a mutual agreement between the states. This transfer was requested to ensure New York would not exceed its 2025 quota. The revised summer flounder quotas for 2025 are: North Carolina, 2,358,106 lb (1,069,619 kg); and New York, 722,157 lb (327,565 kg).

NMFS issues this action pursuant to section 305(d) of the Magnuson-Stevens Act. This action is required by 50 CFR 648.102(c)(2)(i) through (iv), which was issued pursuant to section 304(b) of the Magnuson-Stevens Act, and is exempted from review under Executive Order 12866.

NMFS manages the Pacific sardine fishery in the U.S. exclusive economic zone (EEZ) off the Pacific coast ( i.e., off the U.S. West Coast states of California, Oregon, and Washington) in accordance with the CPS FMP. The CPS FMP and its implementing regulations require NMFS to set annual reference points and management measures for the Pacific sardine fishery based on the annual specification framework and control rules in the FMP. These control rules include the harvest guideline (HG) control rule, which, in conjunction with the OFL and ABC control rules in the FMP, are used to set required reference points, in accordance with the Magnuson-Stevens Fishery Conservation and Management Act (MSA) (16 U.S.C. 1801 et seq. ). The ACL for Pacific sardine is set according to the framework established in the Pacific sardine rebuilding plan, approved on May 29, 2025, as amendment 23 to the CPS FMP (90 FR 23461). Additionally, the CPS FMP requires additional management measures, intended to restrict harvest, for the Pacific sardine fishery, such as incidental catch restrictions.

NMFS publishes annual specifications in the Federal Register to establish these annual reference points ( e.g., the OFL, ABC, and ACL) and management measures for each Pacific sardine fishing year. NMFS published proposed specifications and management measures on June 26, 2025 (90 FR 27273). The proposed rule for this action included additional background on the specifications and details of how they were derived and the basis for which the Pacific Fishery Management Council (Council) recommended them to NMFS for potential approval. Those details are not repeated here. For additional information on this action, please refer to the proposed rule. This final rule adopts, without changes, the annual reference points and management measures as proposed for the 2025-2026 fishing year.

Based on the 2025 stock assessment for Pacific sardine, the associated estimated age 1+ biomass of 30,158 mt, the control rule formulas in the FMP, and the Pacific sardine rebuilding plan (90 FR 23461, June 3, 2025), NMFS is implementing, as proposed, an OFL of 4,645 mt, an ABC of 3,957 mt, an ACL of 2,200 mt, and an ACT of 2,100 mt.

The CPS FMP includes a prohibition of the primary directed fishery when the biomass is at or below 150,000 mt. The Pacific sardine primary directed fishery is therefore closed, and Pacific sardine catch during the 2025-2026 fishing season is prohibited unless it is harvested as part of the live bait or minor directed fisheries, as incidental catch in other fisheries, or as part of exempted fishing permit (EFP) activities.

The 2025-2026 fishing year specifications can be found in table 1, and management measures are listed after table 1.

The following are the additional management measures and in-season accountability measures for the 2025-2026 Pacific sardine fishing year:

(1) An incidental per-landing limit of 20 percent (by weight) of Pacific sardine applies to other CPS primary directed fisheries ( e.g., Pacific mackerel);

(2) If the ACT of 2,100 mt is attained, then a per-trip limit of 1 mt of Pacific sardine applies to all CPS fisheries ( i.e., (1) will no longer apply); and

(3) An incidental per-landing allowance of 2 mt of Pacific sardine applies to non-CPS fisheries until the ACL is reached.

In addition to the management measures and in-season accountability measures listed in the previous paragraphs, Pacific sardine catch in the minor directed fishery remains limited to 1 mt per trip per day, and 1 trip per day by any vessel, per regulations at 50 CFR 660.511(d)(2).

All sources of catch, including any EFP set-asides, the live bait fishery, and other minimal sources of harvest, such as incidental catch in CPS and non-CPS fisheries and minor directed fishing, will be accounted for against the ACT and ACL. Any Pacific sardine harvested between July 1, 2025, and the effective date of this final rule will count toward the 2025-2026 ACT and ACL.

At the April 2025 Council meeting, the Council recommended apportioning 520 mt of the ACL for an EFP proposal to support stock assessments for Pacific sardine. NMFS will publish a notice of receipt of application in the Federal Register and request public comment. After the comment period closes, NMFS will determine the issuance of the EFP.

The NMFS West Coast Regional Administrator will publish a notice in the Federal Register to announce when catch reaches the incidental limits, as well as any changes to allowable incidental catch percentages or trip limits. Additionally, to ensure that the regulated community is informed of any closure, NMFS will make announcements through other means available, including emails to fishermen, processors, and state fishery management agencies.

On June 26, 2025, NMFS published a proposed rule for this action and solicited public comments through July 11, 2025 (90 FR 27273). NMFS received two public comment letters relevant to this action, one from the non-governmental conservation organization Oceana and one from a private citizen. After considering the public comments, NMFS made no changes from the proposed rule. Both comment letters included multiple comments, some of which are beyond the scope of this action. NMFS summarizes and responds to those comments below.

Comment 1: Oceana states that the E MSY used to set the ABC is too high given the low sardine productivity and biomass indicated in the stock assessment, resulting in an ABC that fails to prevent overfishing, rebuild the stock, or adequately constrain U.S. fishery catches and is inconsistent with the best available science on sardine productivity. Oceana states that the Council's Scientific and Statistical Committee (SSC) has repeatedly raised concerns with the E MSY parameter. Oceana also cites a court order in Oceana, Inc. v. Raimondo, quoting the court's conclusion about the scientific record presented to the court in that matter. Oceana states that NMFS has not made any attempt to correct or update its E MSY formula since 2014, and states that NMFS' updated “correlation analysis” reduced the correlation, but NMFS did not provide the SSC with any alternatives, leaving the SSC little choice but to approve the “status quo approach to E MSY .” Oceana requested that NMFS immediately develop and evaluate a range of alternatives for calculating E MSY that do not rely on the CalCOFI index, specifically including alternatives that base E MSY on direct measures of recent productivity reported in stock assessments.

Response: NMFS has determined that the OFL and ABC implemented through this action will prevent overfishing and are supported by the best scientific information available. E MSY is a parameter in the OFL and ABC harvest control rules. As described in the proposed rule for these harvest specifications, the SSC has recommended in past years that the analysis and assumptions surrounding a CalCOFI-based E MSY be revisited. To help inform the SSC's recommendation for this year's reference points, NMFS conducted a correlation analysis of the CalCOFI-based temperature with sardine productivity (recruits-per-spawner) for the years 1983-2023; an update from the last analysis in 2013 that examined data from 1984-2008. The SSC's CPS subcommittee reviewed the analysis in February 2025 and reported that “the analysis demonstrates there is still valid statistical evidence for a relationship between CalCOFI [sea surface temperature] and recruits-per-spawner.” At the April 2025 Council meeting, the full SSC reviewed the analysis and concluded that it “provides the first of many steps toward potentially updating E MSY for Pacific sardine, but does not compel a change at this time.” The SSC recommended the 2025-2026 OFL and ABC be calculated using the “status quo approach to E MSY ,” which uses the CalCOFI temperature index.

NMFS has determined that there is no need to calculate a new E MSY at this time, and that the CalCOFI-based E MSY does not present any risk of overfishing. Additionally, NMFS notes that there is no defined metric for a “high” or “low” E MSY , and Oceana has not provided one. It has been previously suggested that one approach to set a precautionary proxy fishing mortality rate for small pelagic fish such as Pacific sardine is to use a value that equates to one half of the species' natural mortality rate. 1 Based on the estimates of natural mortality from the 2025 Pacific sardine stock assessment, this formula would produce an E MSY in the range of 0.25-0.30. By contrast, the E MSY utilized to calculate the OFL implemented through this action is only 0.1771. For these reasons, NMFS has determined that the reference points recommended by the Council are based on the best scientific information available and, therefore, NMFS has determined to implement them through this action.

NMFS manages the groundfish fishery in the GOA exclusive economic zone according to the Fishery Management Plan for Groundfish of the Gulf of Alaska (FMP) prepared and recommended by the North Pacific Fishery Management Council under authority of the Magnuson-Stevens Fishery Conservation and Management Act (Magnuson-Stevens Act). Regulations governing fishing by U.S. vessels in accordance with the FMP appear at subpart H of 50 CFR part 600 and 50 CFR part 679.

The 2025 total allowable catch (TAC) of Pacific ocean perch in the Western Regulatory Area of the GOA is 1,753 metric tons (mt) as established by the final 2025 and 2026 harvest specifications for groundfish of the GOA (90 FR 12468, March 18, 2025).

In accordance with § 679.20(d)(1)(i), the Administrator, Alaska Region, NMFS (Regional Administrator) has determined that the 2025 TAC of Pacific ocean perch in the Western Regulatory Area of the GOA will be or has been reached. Therefore, the Regional Administrator is establishing a directed fishing allowance of 1,623 mt, and is setting aside the remaining 130 mt as incidental catch to support other anticipated groundfish fisheries. In accordance with § 679.20(d)(1)(iii), the Regional Administrator finds that this directed fishing allowance will be or has been reached. Consequently, NMFS is prohibiting directed fishing for Pacific ocean perch in the Western Regulatory Area of the GOA to prevent exceeding the Pacific ocean perch TAC in the Western Regulatory Area of the GOA.

While this closure is in effect, the maximum retainable amounts at § 679.20(e) and (f) apply at any time during a trip.

NMFS issues this action pursuant to section 305(d) of the Magnuson-Stevens Act. This action is required by 50 CFR part 679, which was issued pursuant to section 304(b) of the Magnuson-Stevens Act, and is exempt from review under Executive Order 12866.

Pursuant to 5 U.S.C. 553(b)(B), there is good cause to waive prior notice and an opportunity for public comment on this action, as notice and comment would be impracticable and contrary to the public interest, as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion, and would delay the closure of directed fishing of Pacific ocean perch in the Western Regulatory Area of the GOA. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data on catch of Pacific ocean perch in the Western Regulatory Area of the GOA only became available as of September 11, 2025.

The Assistant Administrator for Fisheries, NOAA also finds good cause to waive the 30-day delay in the effective date of this action under 5 U.S.C. 553(d)(3). This finding is based upon the reasons provided above for waiver of prior notice and opportunity for public comment.